IN THE NEWS

Crittenden Conferences Inc has announced that Los Angeles-based real estate developer Bob Sonnenblick, Chairman of Sonnenblick Development LLC, has been chosen to moderate their keynote conference panel at the upcoming Crittenden National Real Estate Conference on April 19th in San Diego, California.

The panel topic is:
New Southern California Construction projects for 2019. The conference will take place at The Hard Rock Hotel in Downtown San Diego.

The price of land and construction costs are so high in Los Angeles and across markets in California, that Sonnenblick said he has decided to move and already directed $400M in new investments to Florida.

Sonnenblick, a scion of a real estate family that dates back 125 years in New York, said he is opening a new office in the Brickell neighborhood of Miami and has put all of his investment and development efforts into South Florida. He is keeping an office and residence in Los Angeles for now.

“This is not by choice,” Sonnenblick said after Bisnow’s Orange County Construction and Development event, where he was a panelist. “It’s almost as if the [SoCal] marketplace is forcing me out. I love living here as a resident, but in terms of doing new business here, specifically real estate development, it’s almost impossible now, unfortunately.”

The cost of doing business in California and specifically Los Angeles and Orange County was one of the main topics panelists discussed at the Feb. 12 event at the Irvine Marriott in Irvine.

Sonnenblick’s decision mirrors the dilemma of many developers and general contractors who are facing the same challenges when attempting to develop new projects in California.

California has some of the highest construction costs in the nation. From 2011 to 2016, construction costs rose 13.6% in Los Angeles/Orange County compared to 12% nationwide, according to the Terner Center for Housing Innovation at UC Berkeley. Land prices in California have tripled in Los Angeles and the cost of materials is also going up about 4% to 5% per year, the Berkeley study showed.

Sonnenblick questioned the Berkeley study, saying from his experience construction costs have doubled in the past five years.

“I would give my arm if it only increased 3% a year,” Sonnenblick said. “In the world I live in, if you look at the past five years, we probably averaged 8% to 10% per year compounded increases. Our biggest issues are materials and labor. Right now, labor costs are going up and the premiums that go with it.”

“The shortage of labor is driving a lot of issues,” Urbani said. “It’s not just the cost going up. A lot of subcontractors are being overburdened with work. That causes a lot of issues with finding the right subcontractor.”

Nonprofit labor watchdog Carpenters/Contractors Cooperation Committee Executive Director David Kersh said labor should not be blamed for the rising cost of construction in the state.

Kersh mentioned a recent report that thousands of workers were victims in a $12M wage theft case. In this case, the state of California ordered a subcontractor, RDV Construction, to pay the workers nearly $12M in back wages and penalties, according to the LA Times.

“Right now we have an epidemic of wage theft in the mixed-use [multifamily] and hotel industry so the idea that the workers are the cause or the problem for the rise of labor costs is totally off.”

Though it is difficult to find one single factor to blame for the rise in construction costs in California, the panelists said there is an upside to developing in the various markets in the state.

Sonnenblick said rental rates for retail have gone up. Multifamily projects are in high demand, especially in Los Angeles and Orange County.

There are lending programs such as Commercial Property-Assessed Clean Energy, or C-PACE, that could offset some costs while having a green and energy-efficient building. C-PACE is a type of financing tool that allows a building owner to borrow money for installing energy-saving infrastructure and pay back the investment through a property tax assessment charge.

Sonnenblick said for his company the cost of construction in Orange and Los Angeles counties along with frequent resident opposition and the length it takes to construct and open a ground-up development are still too much.

“We are in a bizarre time,” he said. “There was a time you would find a site, call up your general contractor and the numbers would work. [But now,] those numbers, at least in Orange County and Los Angeles, don’t work.”

Sonnenblick said he decided to stop pursuing development deals in California about three to four years ago.

His company was in negotiations to build a hotel in downtown Los Angeles near the USC Medical Center.

“It was a nightmare,” he said.

“Between the demands of the ridiculous land seller and the city approval process, we dropped the deal,” Sonnenblick said without getting into specifics. “I said, ‘Forget about this.’ I went down to Miami, we were greeted by the mayor with open arms and we found a similar site and now we’re zooming 100 miles per hour.”

Sonnenblick said in today’s landscape in California, it takes a developer eight to 10 years to start making good cash flow off a development project.

“It’s insane, especially when I can go out to various metropolitan areas nationwide such as South Florida, Dallas, downtown Denver and in all of those places you can buy a piece of land and be under construction in one year,” he said. “Here to get through the entitlement process, NIMBYs and local community groups, it takes you in the best case three years.”

Sonneblick said he is keeping his existing portfolio of buildings totaling about 1M SF in Los Angeles and Orange County. His group is currently working on a $40M, 70K SF mixed-use office and retail project on Jamboree Road in Irvine. After nearly three years in the process, the company is still waiting for final city approvals, he said.

But in terms of new business, all of his other projects — about $400M worth of developments such as government buildings, office buildings, hotels and retail — are exclusively in Miami and Fort Lauderdale.

“I’m going to keep my headquarters here in Los Angeles,” he said. “I really do like living here. I’m probably going to split my time six months in each place. … I wish I had some opportunities to build here in LA. There is no such thing as a bargain acquisition of land or buildings. Everything is overpriced and we don’t buy assets that are overpriced.”

Even with Gov. Gavin Newsom wanting to build new housing and state Treasurer Fiona Ma wanting to keep businesses here, Sonnenblick wasn’t sure there was any way to keep his business in California.

“I don’t think there is an answer,” he said. “The only thing that is going to keep developers here is if the price of land and price of construction comes down and that’s only going to happen if we go into a recession. I don’t think the governor or any of the state officials can control that.”

Sonneblick said he hasn’t fully given up on California.

“If you know anyone with any good deals here please feel free to call me. We are always actively looking for new projects,” he said.

IMN Conferences has chosen Los Angeles-based hotel developer Robert Sonnenblick to be the keynote panel moderator for their upcoming Hotel Development & Construction Conference on Feb 25 & 26 at the Downtown Marriott Hotel in New York City.

Construction & Design Differences Between Different Hotel Segments And Brands:

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A March Ballot Measure in West Hollywood May Put Social Club Project in Jeopardy

The Arts Club, which would be built on the Sunset Strip, must now be approved by West Hollywood voters. Photo courtesy of Gensler/The Arts Club.

Voters in West Hollywood, California, will decide whether the city should rescind its approval for the construction of the Arts Club, a London-based private social club backed by Academy Award-winning actress Gwyneth Paltrow that’s proposing a development designed to upgrade the Sunset Strip at the site of a retail outpost of the adult magazine Hustler.

Paltrow, an advisory board member to the London location and founder of the Santa Monica, California-based lifestyle company Goop, has been working with other investors to open the high-profile, 120,000-square-foot social club in greater Los Angeles. Critics of the project argue the site should be used to address the area’s shortage of housing.

The project is attracting attention well beyond West Hollywood partly because of the prominence of Paltrow as well as the street spanning a mile and a half that came into the national consciousness in the 1950s and 1960s with the television series 77 Sunset Strip. This section of Sunset Boulevard runs between well-known areas, connecting with Beverly Hills on the west and Hollywood on the east.

The club’s proposal, which includes a rooftop swimming pool and guest rooms, requires changes to local zoning that the West Hollywood City Council originally voted to approve this year. But following a petition and criticism from residents and a labor union, the council agreed to allow voters to decide whether they should rescind their original decision on the social club project by issuing a city measure for the March ballot.

The measure before voters is whether the resolution approving the project should be rescinded, according to Yvonne Quarker, West Hollywood city clerk. The city’s general plan and other zoning regulations would have to be amended to allow for increased height and density over what is currently allowed on the site, the city said. About 8,150 square feet of the property was zoned for multifamily residential.

The project would require demolition of the existing two-story 20,000-square-foot office and retail building, which includes a 10,000-square-foot lingerie and sex toy shop operated by Hustler Hollywood as well as offices for the Gay Men’s Chorus and the Plus Development Group involved in the Arts Club project, according to CoStar data.

About a handful of West Hollywood residents as well as members of labor union Unite Here 11 urged the City Council to put the matter to a ballot measure. More than 2,800 signatures were gathered on a petition presented by Unite Here, according to Quarker.

Elle Farmer, research analyst for Unite Here Local 11, said among the union’s issues with the project is zoning. About one-third of the land at that site was zoned for housing.

“Despite a housing crisis, that land is being rezoned for this project for a private commercial development,” Farmer said. “Now West Hollywood voters can decide whether it’s a good use of their resources.”

But Steven Afriat, chief executive of Burbank-based Afriat Consulting Group Inc., a local representative for the Arts Club, said the project has “tremendous community support” and that the proprietors welcome the West Hollywood City Council’s decision to put the project up for a vote as opposed to rescinding it.

Downtown Los Angeles-based Gensler designed the proposed project, at 8920 Sunset Blvd ., to include 14 guest rooms, screening rooms, restaurants, office space, an art gallery and a rooftop swimming pool. It will also have operational decorative glass panels as part of its design.

The Arts Club is also proposing a public benefits package that would total about $12.1 million, according to the City of West Hollywood. It would include building about 2,200 square feet of public gallery space that could also be used as a rehearsal space, and be programmed and staffed by the Arts Club for 25 years and free to the public. It would be curated in coordination with the City of West Hollywood Arts Division. The gallery space is estimated to cost $10.1 million. The Arts Club would also donate $1 million to support the arts in West Hollywood over 10 years and pay an additional cash public benefit of $1 million to the city.

Afriat said the Arts Club has also offered $1 million in traffic improvements.

The opening of the club would mark the British club’s first American outpost.

The original Arts Club dates back to 1863 as a place where men involved in the arts, literature and sciences gathered in London, according to the Arts Club website.

Bob Sonnenblick, chairman at Sonnenblick Development LLC, has stayed at the Arts Club in London which he describes as a “lovely, luxury” hotel.

“The West Hollywood design is certainly beautiful, too,” Sonnenblick said in an email. “If anything, dropping a project of that high quality here just might be too upscale for the current Sunset Strip neighborhood.”

The measures is scheduled to appear on the March 5 general municipal election ballot.

If approved, construction could take up to two and a half years to build.

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More From Bob Sonnenblick

I have actually stayed at the Arts Club Hotel in London.

It’s an unbelievably lovely, luxury hotel, located in the Mayfair district of town, one of the City’s most high-end areas…

The rooms & public areas in that hotel are gorgeous, & the service was fabulous. The West Hollywood design is certainly beautiful too.If anything, dropping a project of that high quality here just might be too upscale for the current Sunset Strip neighborhood.

In a nutshell, here is exactly what this dispute is all about:

The developer is proposing a private club. This is just like proposing a condo tower, it is not open to the public.

The opposition is the Unite Here #11 hotel workers union. They want the project to be union-employee staffed, so that their workers would be hired there…regardless of whether it is a private club or a hotel.

The private club has said that it will only hire NON-union workers to work there, once it is completed. The added cost of union worker wages and benefits is very high. Thus, the dispute.

The real truth is that The Union doesn’t truly care if it’s a private club or a public hotel.

This is only about Union vs NON-Union jobs, nothing more…

So if you are Pro Open-Shop hiring, then you like this project, as-is.

IMN Conferences Inc. has chosen Los Angeles-based hotel developer Robert Sonnenblick, the Chairman of Sonnenblick Development LLC, to be the marquis panel moderator for their upcoming Hotel Development & Construction Conference on Feb. 25 & 26 at the Downtown Marriott Hotel in New York City.

Los Angeles-based real estate developer Bob Sonnenblick, Chairman of Sonnenblick Development LLC, has been chosen by IMN Real Estate Conferences, Inc. to moderate their upcoming LA/Southern California Hotel Update panel focusing on hotel construction, development, finance, supply and demand. The conference will be held at The Fairmont Miramar Hotel in Santa Monica on Oct 29. See www.IMN.org for info.

Westfield Topanga Readies for Major Renovation

$70 Million Interior Makeover is in StoreCLICK FOR PDF
By Karen Jordan
September 24, 2018
While many developers across the country are giving up on traditional malls, Unibail-Rodamco-Westfield is investing $70 million to renovate another one of its prime Los Angeles shopping centers.

The company announced this week its Westfield Topanga Mall, a 1 million-square-foot upscale indoor shopping center in the San Fernando Valley’s Warner Center area, is scheduled to be modernized with a sleeker look and updated amentities. It comes at a time when brick-and-mortar retailers are ramping up their competition for shoppers with the growing online shopping industry.

The mall is near the company’s outdoor shopping center The Village and its proposed $1.5 billion Westfield Promenade that could replace a failed mall with offices, residences, hotels, entertainment and stadium space on 34 acres at the site.

The announcement follows Westfield’s $1 billion renovation of its sprawling Westfield Century City mall unveiled last year.

The Topanga mall renovation, which is scheduled to begin this fall, is planned to focus on the mall’s interior. Plans include new dark walnut paneling, tiling, new flooring and new, eco-friendly lighting fixtures. The property’s restrooms and family lounges are scheduled to be renovated while new art work and new security cameras are added. New entertainment and restaurant options are expected to be available in the future, according to the company.

Now is the right time for the project, according to Molly Unger, vice president and general manager at Westfield Topanga.

“This is something our customers have been asking for and we think they will love the results,” Unger said in a statement.

The upgrades show how committed the mall’s owner, Unibail-Rodamco-Westfield, is to Los Angeles, according to Larry Green, executive vice president of U.S. development at Unibail-Rodamco-Westfield.

“By enhancing the destination’s design, décor, environmental sustainability and technology, we will ensure that it continues to offer one of the very best shopping experiences, not just in the local community, but in the entire country,” Green told CoStar News. “This project, in turn, will also support the city’s goals for the Warner Center and is another step towards the creation of a transit-oriented, lively downtown district with entertainment, office, housing, dining and world class shopping elements.”

Work at the mall, which houses high-end stores including Nordstrom, Louis Vuitton and Cartier, is expected to take place after business hours and not during the mall’s opening hours. The shopping mall, at 6550 Topanga Canyon Blvd. in Canoga Park, California, was built 54 years ago.

The renovation is scheduled to be completed next year.

Jay Rubin, principal at brokerage firm Lee & Associates, said that the renovations should help the mall better compete with the conveniences of online shopping.

“It’s important to modernize and provide modern amenities to get people away from their computers,” Rubin said. “I think Westfield, and any company in that business, is investing a lot of time and resources to figure out how to attract people.”

The mall is near a Metro Orange Line bus station and Warner Center shuttle, and it is located within a zone outlined in the city’s Warner Center 2035 plan, which seeks to redevelop the suburban area into a more modern live-work-play community. The plan, under review by city officials, includes more than 400,000 square feet of office, about 1,400 residential units, two hotels and a 15,000-seat entertainment and sports center.

The low-rise project has drawn criticism from local residents who worry about congestion and construction. But others praise its plans for mixed-use design and walkability.

“The plan is a fabulous concept,” said Bob Sonnenblick, principal of Sonnenblick LLC, who is knowledgable of hotel projects in the area. “I actually think it’s going to become a wave of the future and how large projects are going to be looked at, approved and designed.”

Developers Aim to Take Advantage of the Views and the Vibe

Hotel construction has increasingly become part of the view as locals and tourists cruise down Sunset Blvd. in West Hollywood, CA.

Credit: Karen Jordan for CoStar Group Inc.

Driving down the Sunset Strip these days, it’s impossible to miss the cranes and other signs of construction happening.

Much of the action revolves around hotels. There are no fewer than five projects underway along this famous patch of boulevard between Hollywood and Beverly Hills.

Bob Sonnenblick, chairman of Sonnenblick Development LLC, said it boils down to practicality.

“The reason so many hotels are being built on the Sunset Strip is because there is simply no other place on the entire West side where there is high rise-approved land,” he said. “All of Santa Monica and Beverly Hills are now down-zoned to a three-story maximum height. Where else can you find a commercially-zoned piece of land to build a high-rise hotel? It just doesn’t exist anymore today.”

That combined with the “amazing city-lights views,” Sonnenblick predicts there will be continued new development on the Sunset Strip.

The mile-and-a-half long Sunset Strip is also “an iconic location around the world,” according to Matthew May, president of May Realty Advisors. “Sunset has amenities. Sunset has views. Sunset has a history. Sunset has branding.”

The large number of businesses, including talent agencies, entertainment entities, restaurants and night life also make it attractive to developers, May said.

» The sun set on the House of Blues Sunset Strip when it was demolished last year. The site is now being transformed into a Pendry hotel. It is being built by Beverly Hills-based Combined Properties and AECOM and designed by Culver City-based Ehrlich Yanai Rhee Chaney Architects (formerly Ehrlich Architects).

The project will include a 149-room hotel, 40 residential units and around 25,000 square feet of retail space. In addition, the project will offer for-sale residential condos.

» A boutique hotel is also in the planning stages at 8240 Sunset Blvd., formerly the site of the Sunset Beach restaurant, from developer, A.J. Khair Construction Inc., according to the developer’s website.

» Then there’s the Edition West Hollywood Hotel and Residences at 9040 W. Sunset Blvd., at the intersection of North Doheny Drive, from New York-based developer Witkoff Group, Marriott and LA-based Ian Schrager. It will have 190 rooms and 20 condos, according to the City of West Hollywood. The 4-Star hotel should deliver in September, according to CoStar research.

» The 286-room Jeremy Hotel recently delivered at 8490 Sunset Blvd.

» A proposed project at 8950 Sunset Blvd. is slated to offer a 165-room boutique hotel, according to CoStar data. It would include a “jewelry box” design, according to the developer’s website. The project would also include four residences, according to the City of West Hollywood.

A public plaza will be at the center of the hotel with views through a glass bottom rooftop pool suspended six stories above. There will also be a supper club on multiple levels in addition to residential units, retail space and a recording studio. Santa Monica-based Hirsch Bedner Associates is designing it. It was previously slated to be a James Hotel, according to CoStar research.

» The proposed Frank Gehry-designed, $300-million 8150 Sunset project from developer Townscape Partners has faced some challenges. The state’s 2nd District Court of Appeals recently overturned a previous ruling that was blocking the necessary demolition of the former Lytton Savings Building, where Chase Bank is now, to build the project.

However, the developer was also dealt a blow when, at the same time, the court did not hold a public hearing on closing the right-hand lane from Sunset Boulevard to Crescent Heights. A formal review will now have to be held.

» There were also originally plans for an extended stay hotel at 8500 Sunset. CIM Group sold that property in June of last year to a joint venture between Korman Communities and Brookfield Property Group for about $168 million, or about $885,000 per unit, according to CoStar data. It was the largest recent trade in the area.

Korman Communities’ initial plans to convert the property to an extended stay hotel were blocked by local ordinances that prohibit short-term rentals, according to CoStar Market Analytics. The project opened to renters in the fourth quarter of 2017.

» West Hollywood-based Charles Company has also reportedly filed plans with the city to build a 185-room hotel that would include 7,500 square feet of restaurant space and around a dozen apartments on the Strip. It would be located at Sunset and Doheny and designed by R & A Architecture and Design.

According to May, there may also appear to be a hotel boom on the Strip right now because many of the hotel projects took years to get through entitlements.

Hotels on the Sunset Strip also have distinct advantages over hotels in other parts of the city which mainly rely on Monday through Thursday traffic, according to Alan Reay, president of Irvine-based Atlas Hospitality Group.

“The Sunset Strip capitalizes on Monday through Thursday and increases even more on the weekends because of the entertainment business,” Reay said.

On weekend nights, it is a virtual parking lot as cars and limos cruise to night clubs and restaurants on the Sunset Strip.

“What’s driving the Sunset Strip is developers and lenders are looking at how well it’s doing,” Reay said. “It’s such a strong market.”

Bob Sonnenblick, Chairman of Sonnenblick Development LLC, has signed on to speak at Bisnow’s upcoming Downtown Los Angeles real estate conference.

PRESS RELEASE: Los Angeles, California

Bisnow Conferences Inc has announced that Los Angeles-based real estate developer, Bob Sonnenblick, Chairman of Sonnenblick Development LLC, has signed on to speak at Bisnow’s upcoming Downtown Los Angeles real estate conference.

The event will be held on Tuesday April 3rd at The Pettibone Building on 510 South Broadway, in the heart of Downtown LA’s theatre & arts district. The event will kick-off at 3pm & end with a 6pm cocktail reception.

IMN Conference Co has announced that it has chosen Los Angeles-based real estate developer Robert Sonnenblick, Chairman of Sonnenblick Development LLC, to moderate its upcoming conference panel titled “Hotel Brands & Classes: Today’s Development and Construction issues”.

The conference is IMN’s inaugural Hotel Industry event. It is scheduled for Feb 25 & 26 in New York City, at the World Trade Center Marriott Hotel. Joining Mr Sonnenblick’s panel will be representatives from Marriott Corp, Hilton Hotels, and Hyatt Hotel Corp.

Marina Project Waiting on Feasibility Study to Move Forward

PANAMA CITY, Fla. – The Panama City Marina redevelopment project is at one of its most important stages. For almost a month, the developer of the project, Bob Sonnenblick has been conducting a feasibility study along with officials to ensure his plan can actually be done. The study will assess whether or not certain elements will actually be a part of the project. If the study shows that his plan will not be as successful, then the commission will have to re-evaluate aspects of the plan. An update on his progress is expected soon. “He’s in the middle of doing these feasibility studies now, and so we’re going to get an update from our staff within the next week or so to see where we are,” said Panama City Mayor, Greg Brudnicki. City officials are also working on posting updates about the marina project to their website so residents can keep up with the progress being made. The next commission meeting will be held November 28th at 8am.

“I walk out onto this marina, this empty, fallow, unused marina property, and I look and I see this opportunity there,” marina project developer Bob Sonnenblick told The News Herald. “It’s undeveloped, and that’s the key part of it. You don’t really see that many opportunities like this.”

PANAMA CITY — The sunset at the Downtown Panama City Marina is spectacular.

Bright oranges paint the sky and color the water, while a handful of people gather around the bent banister that edges the T-dock to watch, take pictures or maybe fish for grouper. A few people putter around their boats.

But that’s it.

The marina store has closed for the day. The restaurants where people used to dine have long since been torn down. Structural repairs are needed. The grassy field in the center is often empty now that the Pokemon Go app has faded from popularity.

As seven different developers have told Panama City officials over the years, the space is not living up to its potential. Not even close — which is precisely what California-based developer Bob Sonnenblick likes about it.

“I walk out onto this marina, this empty, fallow, unused marina property, and I look and I see this opportunity there,” Sonnenblick said in an interview The News Herald. “It’s a blank canvas. I can lay it out right so it will work. I see this amazing opportunity. It’s undeveloped, and that’s the key part of it. You don’t really see that many opportunities like this.”

Sonnenblick envisions a place that could become a big tourism draw for the area, with two hotels, an enhanced civic center, retail space, apartments, a splash pad and fishing all around the perimeter. But first he has to pitch his $200 million idea to Panama City commissioners — and residents.

Years in the making

The question of how to best revitalize the marina — and by extension downtown Panama City — has been a perplexing one for years, spanning multiple commissions.

When the city started to really tackle the project in 2011 with consulting company AECOM, the state still held the deed to the marina, which limited the project to a park atmosphere without commercial use. The first concept plan in 2012 featured a lighthouse, a splash pad and the addition of several trees. Ultimately, the planning cost the city $755,576.47.

But it was also right around the time the city’s legal counsel began to question whether the state should, in fact, hold the deed. They took the matter to court and won, which put the land in the city’s control and changed the rules.

Commercial, residential and other uses all became a real possibility. The affair cost the city $108,223.89 — but saved about $89,000 a year for 75 years on submerged ground leases from the state, more than negating the cost.

“In the beginning, we were hamstrung by the deed,” said Mayor Greg Brudnicki, who called the original design an under-utilization of space. “We owed it to people to find out what was possible.”

The commission voted to put the redevelopment out to bid. They gave developers a blank slate, with the only condition being they wanted the project to be an economic driver, as the marina originally was intended to be when it was built by the city in the 1950s.

Proposals came back. The commission whittled it down. Developers dropped out. The city, having already spent $177,308.57 on economists and lawyers, went back to the drawing board.

Sonnenblick came into the picture in May 2016.

‘He’s our guy’

Sonnenblick is the sort of man who shows up to a meetings in a golf polo, responds to emails from almost anyone, uses words like “knucklehead” and pauses during an African safari to leave a voicemail. His quirky personality can at times disguise the lengthy resume that led HomeFed-Leucadia — the company developing Panama City’s SweetBay project — to recommend him for the job.

But here’s his resume: From 1981 to 1991, Sonnenblick completed over $1.5 billion worth of commercial real estate transactions on the West Coast at Sonnenblick-Goldman Corp. of California, including numerous high-end hotels. He then handled multimillion-dollar malls before forming his current company, Sonnenblick
Development LLC, which has worked on projects such as buildings for the U.S. Department of Homeland Security and the Federal Bureau of Investigation. He is regularly asked to sit on real estate-related panels.

“He’s our guy,” former Commissioner John Kady used to say, adding people wouldn’t believe the “charlatans” the city has seen. Other commissioners have echoed the sentiment.

But that doesn’t mean every project he’s ever proposed has worked out. Earlier this year, he walked away from a 150-room hotel project near the Sacramento International Airport, according to The Sacramento Bee, after failing to secure funding. And in 2016, he walked away from a project in Pierce County, California, after being asked to scale down the design.

When asked about the Pierce County project, he said he didn’t walk away because of scale, but because of money.

“It’s not a question of walking away because they aren’t grand; it’s a question of walking away because they aren’t financially feasible,” he said. “Those are two different things.”

Finding the sweet spot

The phase where those other projects have fallen apart — the feasibility studies — is the phase Panama City entered into Tuesday night with the commission’s unanimous yes vote to continue the process.

This is the phase that will make or break the deal, when concerns about traffic, utilities, the viability of retail and more will be addressed. As Brudnicki put it, this is “the hard part.”

Between now and February, Sonnenblick will be hiring experts to study every aspect of the proposed design and find what works and what doesn’t.

“I am also going to say to the guys doing the feasibility study, ‘By the way, not only critique what I’ve put on the table, but if you guys have any new ideas you want to throw in, throw it on. Put it on the report. Let’s look at it,’” he said. “I’m totally open to any new ideas that will make the project better, and we’ll find that out over the course of receiving the various feasibility studies.”

Many people have critiqued the current proposals — which some fear won’t be supported by city infrastructure and ruin sunset views — even before the studies. To them, the rough design process equated to putting the cart in front of the horse.

But Sonnenblick said that’s how development works, using a traffic study as an example.

“The key thing to the traffic study is to define the number of new trips that the project will create, and once you have that number you can then define mitigation or the answers to the problem,” he said. “But in order to define and calculate a number of new trips, you must have designated here are the trip generators. Here are the number of hotel rooms. Here are the number of restaurants. Here are the number of apartments.”

Using the density proposal — Sonnenblick’s current submission to the city — the studies will suggest what can be done and what would break the deal. Continuing to use traffic as an example, Sonnenblick said it’s possible a turning lane would be added on Beach Drive or changes could be made to Luverne Avenue or Grace Avenue. Four-laning Harrison Avenue, he said, is not an option that would be considered.

If, in the end, the feasibility studies don’t work out, the city and Sonnenblick would part ways. No money has been exchanged between the city and Sonnenblick Development at this point, though the city has spent $372,868.40 on its own economist and lawyers to vet the plan, and officials have said the city won’t lose anything but time.

In fact, city officials say the worst-case scenario is that a deal can’t be reached and the city walks away with hundreds of thousands of dollars worth of feasibility studies — paid for by Sonnenblick — that they could hand off to the next interested developer.

If the feasibility studies come back with favorable numbers, the city, which would act as the landlord of the project, would start to work out the details of the deal with Sonnenblick, such as how much rent would be and what incentives, if any, the city would provide.

Changing designs

The design for the marina project will change and change again — and change again — based on the feasibility studies, Sonnenblick has said. But that hasn’t stopped people from forming opinions.

The loudest might be Save the Panama City Marina, a Facebook group that has distributed about 400 lawn signs and some of whose members are vocal critics of the plans so far. About 30 members protested at the most public hearings, saying the development will ruin views, take away public access and kill brick-and-mortar retail. They have said they want a “classic marina.”

The city and Sonnenblick are actively working to address those issues. The city, for instance, is starting to work with the Department of Environmental Protection on building another boat ramp downtown and coming up with a plan to relocate wet-slip tenants during the construction period.

But Sonnenblick also has said that, while he’s listening to the group, it’s not enough to make him turn away from the project.

“There were 30 people out front of City Hall,” he said. “If there were 30 people picketing out of 30,000 residents, that led me even before last week’s city meeting started to be very pleased. Now they’re 30 vocal people, but 30 people out of 30,000 … it’s minuscule.”

Before voting yes, all the commissioners said the majority of people they have spoken to like the current marina concept, though they also said there are parts they don’t like at this point.

But as Commissioner Ken Brown emphasized, chances like this don’t come around every day.

“As far as this marina project, hey, this is the best thing since Carter Liver Pills, I’m gonna tell you,” Brown said. “This is the best thing that is going to happen to Panama City.”

Press Release: September 21, 2017
Hotel Management Magazine and Questex Conferences Inc are pleased to announce that Mr. Robert Sonnenblick, Chairman of Los Angeles-based Sonnenblick Development LLC has been chosen to moderate the “Hotel Brands” panel at their upcoming Hotel ROI hospitality conference on October 11th.

The conference will be held at the Events Center at Johnson & Wales University in
Charlotte, North Carolina, and will begin at 8am. The Brands panel will feature hotel
industry leaders from across the East Coast.

The Panama City Marina project is moving forward, but not without some contention.

Tuesday’s public meeting on the Panama City Marina brought out many locals. The project’s developer Bob Sonnenblick laid out the latest designs.

Among the changes: more green space, a boardwalk, and a public fishing pier. also includes an amphitheater, water taxi terminal and retail stores with apartments on top.

“While I don’t know all the details. They’ve changed so much about the marina project. I do think that the growth and the potential that it has to bring more people to our area is great and I think it will be great for businesses,” Karen Vargas Hatcher, owner of Planted True said.

City leaders say things aren’t set in stone.

“We’re going to find out what the probability is now when these feasibility studies come back,” Mayor Greg Brudnicki said. “They will tell us what type of restaurants, how many restaurants, how many hotels.”

Others say the plans may be headed in the wrong direction.

“Say Mr. Sonnenblick builds all of this and it turns out to be nice, but maybe after a couple years some of the things maybe don’t work out which we’ve seen in many other areas,” Jane Lindsey, owner of Elegant Endeavors Antique Emporium said. “So is there a plan for what’s going to happen at that point?”

PANAMA CITY, Fla. (WJHG/WECP) – Despite new developments to the current plans for the marina project, some Panama City locals say they still are not pleased.

Project developer Bob Sonnenblick presented new plans with the changes he says the city commissioners have expressed to him and what locals have asked about.

Sonnenblick laid out his plans at city hall Tuesday evening in front of the community and commissioners.

He’s added triple the amount of green space, a boardwalk, a splash pad and a public fishing pier. He’s also tripled the number of benches and seating so people can enjoy the sunset by the marina.

The movie theater, water taxi terminal and hotels are still in place.

Some locals at the meeting praised the project saying it’s what the area needs for revitalization.

Others say the project could still use some fixing.

“That design is just nothing but glut. It’s like putting downtown Manhattan on the marina. It’s just a gross glut of buildings,” Frank DePinto, a vocal critic of the marina project said. “It’s blocking all the scenery and it’s destroying the marina.”

“Name a water front marina in the state of Florida that is not developed? You can’t. Now Bay County is one of the poorest counties in the state of Florida. Don’t we deserve a world class operation?” Larry T. Clemons, owner of Gallery 721 in downtown Panama City said, “Don’t we deserve a world class city and entertainment area for our children?”

Sonnenblick is working with Bellingham Marine. A representative from the company says they’ll be part of building more than 230 boat slips for the marina project.

Sonnenblick says these changes are still not set in stone. Panama City commissioners will discuss the marina project again at their next meeting on September 26th.

A small park, a splash pad, and the promise of trying to recruit a grocery store have been added to the design to appeal to locals hesitant about losing space.

PANAMA CITY — The latest concept plan for the Downtown Panama City Marina, submitted by developer Bob Sonnenblick on Thursday afternoon, is meant to draw in locals and tourists to the massive revitalization project.

A small park, a splash pad and the promise of trying to recruit a grocery store have been added to the design to appeal to locals hesitant about losing space. Inside the public boardwalk that forms the perimeter of the project are retail, parking garages, apartments and two hotels that create a ring around much of the land portion of the project, and a relocated water taxi terminal required the boat ramp to be moved to West Beach Drive. The T-dock keeps the marina store and boardwalk but adds at least two restaurants, a lighthouse complex with a sea organ, and a commercial space with a use that is yet to be determined.

“The concept plan should be viewed as a whole, and not as individual separate uses,” Sonnenblick wrote in his letter to commissioners. “Without all the different uses working together the marina project (as a whole) will not be feasible.”

The proposal, due by Sept. 1, is the first major submission Sonnenblick and his team were required to make under the amended exclusive negotiating agreement (ENA). The goal is “to give the commission a formal opportunity to conceptually approve the use, massing and function of the improvements to be placed on the marina site, subject only to subsequent confirmation,” according to the ENA.

There will be at least two public hearings on the plan, and the commission can choose to conceptually approve the plan, approve with conditions, modify or deny the plan. However, to move forward with letters of intent and feasibility studies, Sonnenblick said he would “need” a favorable vote.

In his letter, Sonnenblick highlights how different pieces of the plan could become “assets” to the community, helping to buoy economic growth and tourism.

For example, he explains the 150,000 feet of retail space — one of the most controversial elements of the plan — could include local stores and fill community needs such as a long-hoped-for grocery store.

Our belief is that visitors will travel for an hour to a destination retail shopping district provided there are a variety of quality retail stores there,” Sonnenblick wrote, adding he expects gross sales revenues of more than $60 million. “Although visitors to Bay County will be attracted to this retail shopping district, it is our intention to also include local stores that would serve residents (who live in) the downtown area or nearby.”

He also wrote that in addition to the apartment spaces he proposed, which would be above the retail space and parking garages, the city should “explore providing incentive to entice other developers” to build downtown.

Feasibility studies still have to be completed to iron out the finances and logistics, but Sonnenblick said he believes the plan will be successful. He noted he believes the city’s infrastructure is adequate, including water, sewer and the road grid.

Sonnenblick has said he plans to be in town Sept. 11 for the first public meeting on the plan.

While the marina project was not on the agenda, it was the focus of the conversation during Tuesday’s commission meeting.

PANAMA CITY — Developer Bob Sonnenblick is expected to present the latest drafts of his plans to redevelop the Downtown Panama City Marina before the end of the month.

Under the exclusive negotiating agreement, the city set Sept. 1 as the goal for submitting the density for the project and as a juncture for the commission to give conceptual approval.

“Mr. Sonnenblick (is) to give to the city before Sept. 1 his desire as far as the density and site plan, and then the public hearings will occur in the first part of September,” said City Attorney Nevin Zimmerman. “I anticipate the submission coming relatively soon.”

Dates have not been set for the public hearings, but Zimmerman said the commission is considering Sept. 11 as a possible date. Two hearings are anticipated, according to the exclusive negotiating period.

While the marina project was not on the agenda, it was the focus of the conversation during Tuesday’s commission meeting. Ten speakers voiced support of the marina project during the public comment period, urging the commission to accept the conceptual plan.

“There comes a time in every politician’s life where you either cinch up your courage and do something significant or you kick the can down the road,” said attorney Alvin Peters. “And I think you are at that particular point.”

Locals express support for marina redevelopment project

Posted: Tue 4:52 PM, Aug 08, 2017 | Updated: Tue 6:55 PM, Aug 08, 2017PANAMA CITY, Fla. (WJHG/WECP) – “You know it wasn’t on the agenda and so many people from so many different organizations came out today and the lion’s share of them were for marina redevelopment,” Panama City Mayor Greg Brudnicki said.

A plan to liven up downtown Panama City by redeveloping the marina has been criticized by many. Some locals have expressed their concerns, but others supported the idea at Tuesday’s city commission meeting.

“Everybody’s doing all their lobbying, you know the devil’s in the details, we’ve still gotta go through and figure out number one, what’s feasible, what we can put on here and we know we’re not going to make everybody happy, but there was a tremendous amount of positive feedback today, to pursue the development,” Mayor Brudnicki said.

Roughly 20 people attended the meeting in support of the redevelopment, all of whom agree that something has to be done.

“There’s been a flight to the beach, a flight up 77, a flight up 231, everything has left the downtown [area] and it’s continued to happen for many, many years and so we do need to do something that’s going to be the spur, the catalyst, the thing that’s going to rejuvenate the downtown area,” Brudnicki said.

Representatives from the Bay County Chamber of Commerce say community support for the marina redevelopment project and for commissioners overall, will help advance Panama City.

“The point that we’re trying to get across is: let’s take a look at this plan, let’s adopt the plan, do the next public hearings and then the feasibility [study]. That feasibility study will tell us what will and will not work,” Bay County Chamber of Commerce President Carol Roberts said.

The project developer, Bob Sonnenblick, will be presenting a conceptual plan to commissioners next month, but financing the project is still a concern for some.

“You know we’ve got this asset, we just have to be mindful that we don’t put the burden on the taxpayers, but that we do something that everyone can benefit from,” Mayor Brudnicki said.

If the plan is approved, the developer is expected to start construction by January of 2019.

Bisnow Conferences Inc has chosen Los Angeles-based real estate developer Bob Sonnenblick, chairman of Sonnenblick Development LLC, to speak at their upcoming “O.C. Construction & Development Conference” to be held at the Hilton Hotel in Costa Mesa on Tuesday July 25th at 8am.

Questex Conferences and Hotel Management Magazine are pleased to announce that Mr. Robert Sonnenblick, Chairman of Los Angeles-based Sonnenblick Development LLC, has been chosen to moderate the “Hotel Brands” panel at their upcoming Hotel ROI Conference on June 22nd in Downtown Los Angeles at The Indigo Hotel.

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NY-based conference producer iGlobal Forums Inc. has announced its selection of Los Angeles-based Bob Sonnenblick, Chairman of Sonnenblick Development LLC, to speak at their upcoming Real Estate Lending & Investment Summit on Wednesday May 17th at the Pierre Hotel in New York City. Mr Sonnenblick will speak on the topic of: Demystifying the Capital Stack, a discussion on Mezzanine Financing in today’s real estate marketplace.

After the initial session, Mr Sonnenblick will also lead a second panel on: The Borrower’s
Insights on the Mezz & Preferred Equity World.

PANAMA CITY, Fla. – Tuesday night, city officials and developer Robert Sonnenblick held a special meeting to reveal updated Marina Redesign Plans. Sonnenblick presented the public with a 3D model that provided a detailed showing of the revisions. The updated plans were designed and revealed after a string of special meetings to get public input.

“I’m excited about the marina project. I think having a lighthouse, restaurant, hotel, all of the things I’ve heard about it are really positive things,” said Little Mustard Seed Owner Greg Snow.

Snow has operated his business out of a shop off Harrison Avenue for two years. He, along with the commission, believe the revised plans will improve economic growth downtown.

“I’d really like to have some residents at the marina project, more people that will eat at our restaurants here, shop at our store, shop for a quick gift maybe on the way home,” said Snow.

“The mayor has said and all of us have said we want to unleash the potential of downtown Panama City, and this is the catalyst that can do that. This can bring Harrison Avenue to life,” said Panama City Commissioner Billy Rader.

Wayne Wright has been a Panama City resident for over thirty five years. He has followed the redesign plans every since they began years ago and remains hopeful that the project is actually moving forward.

“I think it would be beautiful now that they got the wheels in motion, if they can get it to go in the way that it’s supposed to go and everybody do their end of it,” said Wright.

Rader believes Sonnenblick has incorporated the components that citizens have emphasized the most.

“He can’t do everything that everybody he wants, but he’s going to do the best that he can and what his bank will allow him to do and what the commission will approve. Nothing has been approved. No contract has been signed. We need to be realistic about this,” said Rader.

The final plans for the redeveloped marina are due by late May. However, Sonnenblick is requesting an extension. The commission is assuring that more public meetings will be held before any plans are finalized.

PANAMA CITY, Fla. (WJHG/WECP) – Panama City commissioners are talking about new ways to bring more people to downtown through the area’s marina project. New designs were revealed at Panama City marina development meeting on Tuesday.

Bob Sonnenblick, the marina project’s developer showed a 3D design at the meeting. Some at the meeting say they were pleased to see a more detailed plan for the marina space.
In the meeting Sonnenblick announced two new additions to the existing marina design. The first was a series of factory outlet stores spanning over 150,000 sq ft. He says they will be high end stores that offer discounted prices. Sonnenblick says that should bring more foot and car traffic through the downtown area.

Sonnenblick’s second announcement was his plan to build properties on Beach Drive near the marina. He proposed two high rise buildings, one rental and one residential building.

“I am concerned about the boat trailers and the people that live here that like to use our waterfront. This is part of the reason we live here,” Lesley Fontaine said. She lives in Panama City.

“Then he’s added this new idea of retail that sounds interesting. I’d like for the stores to be more exciting than just saying outlet stores, but still it sounds like they really are bringing in people,” Camila Jimmerson said. She’s also a Panama City local.

During the open comment portion of the meeting some locals expressed concerns about traffic along Harrison Avenue. They say the current street conditions cannot handle more cars on the roads than it already does currently.

Throughout the meeting Sonnenblick made it clear these designs are not final. He even pointed out several things that could be changed before the meeting ended.

Sonnenblick says all parts of the new marina will be built at the same time in one phase. He estimates the entire project will take two years to complete.

PANAMA CITY — Developer Bob Sonnenblick returned to Panama City on Tuesday night with big dreams and bigger promises for the marina redevelopment project, which now includes an outdoor outlet mall and white sand beach along East Beach Drive.

Saying he “would not leave” without answering everyone’s questions, Sonnenblick, along with his partners at Bellingham Marine, Florida Architects and GAC Construction held the floor for more than two hours, fielding questions, comments and concerns from the public, mainly focused on the boat ramp and potential parking.

It was the first time the developer has been in town since reviewing public comments regarding the project forwarded by the city. Many of those comments expressed concern that the project was becoming overcrowded and some residents were upset at the recent addition of outlet stores around the Marina Civic Center, particularly because they block access to the boat ramp.

“We will not build this project without boat ramps … and parking,” Sonnenblick told the audience, adding that the boat ramp, which he proposes to double in size, likely will be moved to the other side of the marina along East Beach Drive.

Also featuring heavily in the plans presented Tuesday were a pair of high-rise residential towers on property owned by George Kingston, who Sonnenblick referred to as a “partner.” The plans call for the relocation of East Beach Drive to accommodate the condos and a white sand beach across the road.

“This is going to be an amazing beach,” Sonnenblick said.

With the addition of the residential towers, Sonnenblick hinted a grocery store might be back on the table for the downtown area, declining to state names, but saying it was an entity which had an agreement several years ago that fell apart.

Tuesday’s meeting also saw the debut of Bellingham Marine, Sonnenblick’s replacement for Legendary Marine, to answer questions regarding the actual marina function of the project. Manager of Project Development Steve Ryder said the new marina will have 236 slips and accommodate boats up to 200 feet long.

Sonnenblick also promised to keep a fishing pier, as well as a lighthouse, which in models shown during the meeting was more of a glass tower-type structure with a stairway and observation deck. Parking would be confined to garages flanking Harrison Avenue on either side of the marina’s entrance, as well as under a sloped esplanade running down the middle of the marina where the marina’s green space currently is located. The 9/11 memorial also would be moved, likely in front of the Civic Center.

Sonnenblick said the price tag on the project will be close to $300 million and construction will take two years. The developer said phased construction “wouldn’t work” and would be done all at once.

Above all, Sonnenblick emphasized nothing is set in stone with regards to the marina, especially because the city has not officially selected him as the project’s developer. His exclusive negotiating agreement with the city expires in May and will need to be extended, he said, for him to be able to conduct the feasibility studies he needs to move forward.

“We’ve redesigned the marina,” he said. “It will work now. It will be a working marina that will last 30 years.”

Residents were skeptical but encouraging during public comment, with many expressing hesitancy about the scale of the project, but wishing Sonnenblick luck.

Bob Sonnenblick speaks at a Marina workshop meeting at Panama City City Hall on Tuesday.

Posted Apr 23, 2017 at 6:08 PM
Updated Apr 23, 2017 at 6:17 PM

By KATIE LANDECK
News Herald Reporter

PANAMA CITY — Developer Bob Sonnenblick will be back in town on Tuesday to answer questions and present changes to his vision for the downtown Marina redevelopment project.Sonnenblick, who is an exclusive negotiating agreement with the city to try to win the project, was in town one month ago to show his designs. Since then, the city has forwarded comments and questions from dozens of citizens to him for review.

“We have carefully reviewed every single comment that was received from the community,” Sonnenblick said in an email. “We will address each one at the 4/25 meeting.”

The meeting will be at 6 p.m. at City Hall.

In conversations over the past month, Mayor Greg Brudnicki said he’s been pleased with the tone of the conversations with the developer.

“It’s been very positive,” he said.

Based on the most recent designs, residents have expressed concerns the project is overcrowded and in need of more green space and more panoramic views of the city’s waterfront. There was also consistent critique of a proposed movie theatre.

As a result, Sonnenblick said is team is making “design changes” this week to present at Tuesday’s meeting.

This will be the fourth version of the designs presented to the public since the exclusive negotiating period started last May, and officials such as the City Manager Jeff Brown have cautioned there will likely be many more. Past changes have included minimizing the “carnival area” and keeping the boat ramp.
The meeting is expected to also be attended by his partners Bellingham Marine, SMG Theatre, Marriot hotels and GAC construction.

People who still have questions are encouraged to submit them on the city website pcgov.org.

“He said he was going to address every single issue and wouldn’t have any problem,” said Brudnicki. “If there are any others left, please submit them ahead of time.”

PANAMA CITY, Fla – The Panama City Marina has been the anchor for the downtown area since the 1950’s, but it wasn’t until 2014 that the city actually gained complete ownership of the facility from the state. That gave city officials the right to develop the marina, partnering with for-profit businesses. Some believe the right development could reverse a 40-year trend.

“How do we use the marina as a catalyst to build on to revitalize downtown? Because for the last 30 years, if you look at it, everything’s been a flight to the beach. There’s been a flight to 77, and downtown has continued to lose customers and lose business and it was time. So, when we got ownership, that gave us the ability to have public private ownerships on the property,” said Panama City Mayor Greg Brudnicki.

Last year, city commissioners hired Robert Sonnenblick, a Los Angeles developer with more than 30-years experience, and Peter Bos, a successful Destin businessman and developer, to envision the marina’s future. The new partnership, called NewCo LLC, has pitched what they call “rough” proposals.

Both Exhibit-A and Exhibit-B are similar, calling for hotel space, restaurants, entertainment or theaters, boat storage and service facilities, parking structures, apartments, and a major renovation of the marina civic center. Exhibit-B floats business names like Hilton and Marriott, Maguire’s Irish Pub, Jimmy Buffet spin-off’s Lulu’s and Landshark, and Bonefish Grill.

“It will spur people coming. If there are people coming, it will spur people to live downtown, and it will create jobs. We just want to make sure it’s done correctly and that whatever we do is beneficial to the public as a whole,” said Brudnicki.

“I’m not really keen on national themed chains,” said Panama City Commissioner John Kady.

Commissioner John Kady says he’s taking his cues from earlier public meetings, where residents told commissioners what they wanted at the marina.

“Those original guidelines – they’re very explicit. One – public access to the water, including boating and fishing, public and private entertainment venues for enjoyment, mixed retail, restaurant, office space, attractive and adequate parking facilities, civic activity space, connections to and elements of public art, an overall mix of projects that provide a substantial economic benefit to downtown, not just to this site,” said Kady.

“We asked to see restaurants on the marina. We asked to see a hotel. The civic center is, according to what we’ve talked about on our conference calls, an integral part of the deal. So, if you have people coming and staying at the hotel – going to upgraded shows at the civic center for the public – do you put a movie theater down there? There are some commissioners that say they don’t like that. I’ve talked to a lot of people that would love a movie theater downtown – that don’t want to go to Pier Park. Something for the locals,” said Brudnicki.

When commissioners cancelled Tuesday’s public meeting to hear the developer’s plans, criticized Kady decided to hold his own town hall, saying there’s not enough information available.

Brudnicki defends the decision.

“They weren’t ready. And I said, if you’re not ready, don’t come in here with some half-baked deal. We don’t want to see a piece of paper with scribbling on it. ‘We think we can do this. We know we can do this.’ We wanna see something – one – that we can eventually take to the public and say, guess what? They can deliver this. Do you want it?” said Brudnicki.

“This is being created for one purpose and that is that this will be the destination. It’s almost like they know they have a requirement to enhance the city so it’s like, ‘Oh yeah, of course this is gonna enhance the city.’ But it is intended to be a standalone,” said Kady.

“This is for, not only people that live downtown, but Bay County. This is for all over the region. But, if that doesn’t happen and we can’t do it, we’re going to exhaust all effort to make sure that we find out. Because we owe it to the public to unleash the potential of what we have downtown,” said Brudnicki.

Peter Bos stressed that anyone is yet to see his and Sonnenblick’s final marina development plan.

Panama City officials are expecting the new marina development, which moved into the planning stage this year, to be the catalyst the area has needed to move into a new era.

By Katie Landeck | 522-5114 | @PCNHKatieL | klandeck@pcnh.com
EDITOR’S NOTE: This story ranked No. 4 in a News Herald editorial poll of 2016’s top stories. This series will continue through Jan. 1 and online at newsherald.com.

PANAMA CITY – Little by little, Panama City leaders have laid the groundwork this year for the revival of Panama City’s downtown.

Panama City officials are expecting the new marina development, which moved into the planning stage this year, to be the catalyst the area long has needed to advance into a new era.

“This (project) releases the potential of downtown,” Mayor Greg Brudnicki said in August after tentative design plans were first unveiled.

Riding the unrealized potential, nearly a half-dozen other projects were launched in 2016, ranging from the creation of apartments, to business investments, to other beautification efforts. Community leaders are hoping the domino effect of projects will build a “live, work, play” environment in the downtown, perhaps best summed up the Downtown Improvement Board (DIB) brand promise released this fall.

Their vision pledges to create “walkable community that provides urban loft living, authentic experiences and access to recreation” as well as places to work and a view of the bay.

A new look

All through the year, Panama City residents were offered a taste of what could come for the downtown as design plans trickled out.

In April, they received their first taste of the immediate future for the downtown when the Community Redevelopment Agency (CRA) released a video of the redesigned Harrison streetscape, with parallel parking, new landscaping, a roundabout and much wider sidewalks to accommodate outdoor shopping and dining.

While plans to start construction this year fell through, CRA Director Jared Jones said work will start next year. In the meantime, he and his staff are tweaking the designs, including looking at whether any palm trees will stay.

The biggest proposed changes, however, came in August when Sonnenblick Development released a proposal for $200 million worth of construction on the marina. The plans have since gone through several iterations as things have been deleted and added as part of an ongoing back and forth between the City Commission and developer.

The latest designs, released in late December, emphasize entertainment, fishing and cultural opportunities, and maintain the signature lighthouse first proposed. Construction is a ways away, but the plans should take a solid form in 2017.

The business side

The business side of the downtown saw a boost this year as store owners, quasi-government agencies and even the police departments started to change the culture.

For years local officials have said their needs downtown are living spaces and jobs, and those pieces finally started to fall into place. Several store owners turned the space above their business into apartments with instant success, and Jellyfish Health, a health-care technology company, moved into a larger downtown building on Oak Street – they already had a smaller presence on Harrison – with the promise to add 100 high-paying jobs in the next two years.

“These people have sort of jumped the gun to do it at a lesser cost,” Brudnicki said. “Once the marina is done and successful, the price is going to go up.”

Government spent the year working to bolster these efforts.

The police stepped up to more aggressively police vagrancy in the downtown at the request of business owners. Destination Panama City worked to market the shops – as well as the rest of the city – to outside markets, such as Atlanta, Baltimore and Nashville, Tennessee, even landing several restaurants in the pages of USA Today. The city bought the Trustmark Bank building in the heart of the downtown with promises to add foot traffic, vibrancy and more importantly parking.

And then the DIB, after a rocky summer marred by firing its executive director, resignations and a general lack of direction, the board found its footing this fall with an assist from Jennifer Vigil, CEO and president of Destination Panama City. The board found a path forward as the local marketers for the downtown, hired an event planning company to improve events, particularly a rebranded Friday Fest, and put forward a new marketing campaign renaming the downtown “Harrison.”

Yet to come

All of this planning, officials said, poises the downtown area for a strong 2017.

“We have made huge strides in getting Panama City on the map as a tourist destination,” Vigil said. “And our timing couldn’t be better as our city leaders announced an agreement this year to work with Sonnenblick Development LLC on the redevelopment of the Panama City Marina. We are laying the groundwork now to support this new multimillion-dollar investment in our community.”

Posted Dec 16, 2016 at 6:00 PM Updated Dec 17, 2016 at 11:50 AM
The new documents show the look of the project, dubbed MarinaVillage, has remained largely consistent with designs presented in August, emphasizing recreational activities to draw people in. Rough estimates indicate Panama City stands to make hundreds of millions from associated leases and taxes
By KATIE LANDECK
News Herald Reporter

PANAMA CITY – A clearer picture of the anticipated costs of the marina redevelopment and how the completed project might look have come into focus with the release of Sonnenblick Development’s financing proposal.
Documents received Thursday show the look of the project, dubbed MarinaVillage, has remained largely consistent with designs presented in August, emphasizing recreational activities to draw people in. And rough estimates indicate Panama City stands to make hundreds of millions from associated leases and taxes.
City officials cautioned the proposal is not a done deal, and they still are waiting on more information about the budget, timeline and other aspects of the proposal.

A tremendous amount of detail is yet to come,” City Attorney Nevin Zimmerman said Friday.
As it stands, some key changes to the design include the addition of a fishing pier, a boat sales and service area, a movie theater, a convention center and a possible apartment complex in “phase II.” A plan for dry boat storage and arcade have been deleted from the plans.

“I think it’s closer to what the commissioners want,” said City Manager Jeff Brown, who oversees the project. But, he cautioned, “this is not the end-all, be-all. This is the starting point.”

The bulk of the marina still is being transformed into an outdoor play area similar to HarborVillage in Destin, with an amphitheater, outdoor marketplace, restaurants, lighthouse and water shuttle.

There still will be about the same number of places to park a boat.

Sonnenblick Development still is planning to pay to revamp the Marina Civic Center.

There still are plans to add up to two parking garages near the entrance.

The current Bay County government building still will be removed.

What’s changed:

A plan for dry boat storage has been removed. A boat service and sales area has been added in its place, as well as a potential 100-unit, nine-story apartment complex in Phase II. As part of these changes, the city attorney said there is talk of keeping the boat launch.

A plan to use the old library building for hotel facilities space and the current City Hall as an arcade has been nixed. Instead, they are proposing two hotels – first, a 150-room Marriott, and then a 150-room Hilton in Phase II – and a movie theater and convention center.

A crew works on the T-dock at the Panama City Marina earlier this fall. ANDREW WARDLOW/NEWS HERALD FILE PHOTO
Thursday
Posted Dec 15, 2016 at 6:53 PM

Panama City gets financial plans for marina

The financing proposal, delivered late Thursday, outlines what Sonnenblick Development believes is financially feasible for the project and offers to invest a substantial sum in the city, according to City Manager Jeff Brown.

By Katie Landeck | 522-5114 | @PCNHKatieL | klandeck@pcnh.com
PANAMA CITY – The developer for the Panama City Marina project has sent the project’s financing proposal to the city, meeting its deadline on the nose.

The financing proposal, delivered late Thursday, outlines what Sonnenblick Development believes is financially feasible for the project and offers to invest a substantial sum in the city, according to City Manager Jeff Brown. It also marks the beginning of serious negotiations between city leaders and developers about what will be built.

“We’ve been talking in generalities with Sonnenblick about things they want to do,” Brown said. “Now we’re at the point we’re looking at the business side, and the question is, ‘What can they do?'”

In this upcoming phase, it will become clear how much money the city will be expected to pay for the project, what the impact will be on existing infrastructure, what will happen with existing boat slip renters and what actually will be built.

The proposal was not made available to The News Herald late Thursday, as it was submitted after the city’s business hours.

Brown cautioned it will take the city weeks to fully analyze the proposal, emphasizing it’s not a done deal. The analysis will look at how the project could generate growth for the city, how it fits into the long-term vision for the downtown and whether it meets citizens’ needs.

The city commissioners plan to talk about the proposal at upcoming meetings and then hold a separate public workshop once they have a better understanding of the plans.

“Before we make a decision, before we vote on anything, we are going to bring it to the public,” Mayor Greg Brudnicki said. “We are going to say, ‘We think this is good; what do you think.’ ”

The financing proposal also will be made available on the city’s website, www.pcgov.org, under the section for public comments.

“We all feel it is important to get public input,” Commissioner John Kady said.

The original designs, which repeatedly have been called a rough draft, included a lighthouse, carnival area, dry boat storage, two hotels and much more. Many of the items, such as the dry boat storage, have faced scrutiny from commissioners.

Until the financing proposal is released, it’s unclear how the feedback from commissioners might have changed the design.

Incredibly compelling conversation about Westside hotel development and One Beverly Hills with Bob Sonnenblick from Sonnenblick Development and Jay Newman from The Athens Group at RENTV’s Aug 18th Westside of LA State of the Market Conference

With the yes vote, the commission has given developer Bob Sonnenblick the go-ahead to begin feasibility studies that examine what types of businesses the marina would best support, including types of hotels and marina activity.

By KATIE LANDECK
News Herald Reporter

PANAMA CITY — In a 4-1 decision, the Panama City Commission voted Tuesday night to continue to work with Sonnenblick Development on the marina redevelopment, moving the project into a phase that opens the door to more public comment and starts feasibility studies.

“All this is is the next step forward,” Mayor Greg Brudnicki said.

With the yes vote, the commission has given developer Bob Sonnenblick the go-ahead to begin feasibility studies that examine what types of businesses the marina would best support, including types of hotels and marina activity. Sonnenblick previously has said he is planning to spend “several hundred thousand dollars” on studies.

He is expected to formally report back on his findings Dec. 15, as the commission voted to give him a one-month extension.

The sole no vote was from Commissioner John Kady, who made it clear he supports Sonnenblick and thinks he is “the guy” but voted no due to several concerns. He said his primary concern is that starting the feasibility study would be misguided until the commission gives unified input on the MarinaVillage proposal that Sonnenblick presented — with the help of Destin developer Peter Bos of Legendary Entity — during the commission’s August meeting. Kady felt that starting the studies without input was potentially a waste of money.

“I don’t want to set him loose to start working until he knows the consensus of the commission,” Kady said.

Other commissioners and two lawyers assured Kady that is not what was happening, pointing to Sonnenblick being given and incorporating feedback into the design. For example, a proposed dry boat storage facility already has been scratched and more public space has been added. Over Labor Day weekend, all of the commissioners provided Sonnenblick with feedback behind the scenes about what they liked and disliked about the plans.

Moving forward, Brudnicki said the commission will continue to provide feedback in real time, and Commissioner Billy Rader agreed with Kady’s request for more public meetings to discuss.

Public comments

During Tuesday night’s packed meeting, the commission heard numerous public comments that ranged from a request to “stop it now” to people saying they “loved it.”

But as Commissioner Mike Nichols repeatedly has pointed out, nothing about the current plan is final.

“It’s pretty pictures. It’s not necessarily what you are going to do,” he said.

Kady also expressed concerns about Sonnenblick’s choice of Bos as a business partner, as the agreement shows Bos’ company, which has a complicated legal and financial history, as having a 20 percent stake in a new limited liability company that will be formed to work on the project.

City Attorney Nevin Zimmerman also worked to answer those questions.

While the legalese is complicated, essentially in the agreement Sonnenblick has set up his company as the managing entity, meaning he will be making all of the decisions and Panama City is only contracted with him.

Many more details are yet to be ironed out.

PANAMA CITY — Taking the next step forward with the marina redevelopment, the Panama City Commission will vote Tuesday on whether to continue to work with Sonnenblick Development.

During a 5 p.m. meeting, the commission will publicly go over the proposed plan for the redeveloped marina, called MarinaVillage, for the first time since developer Robert Sonnenblick, the principal of Sonnenblick, presented it in August. The current design, which can be amended as the project moves forward, calls for waterfront dining, boat storage, family-friendly activities and a lighthouse. Approval of that proposal is dependent on what the feasibility studies find.

The studies “will look at some of the bigger pieces of the things that have been proposed and make sure they are financially feasible,” said City Manager Jeff Brown. “If they’re not feasible, we’ll work to adjust.”

While the whole plan may be talked about, the commission is only voting on whether they want to continue to work with Sonnenblick, and by extension, his partner for this project, developer Peter Bos of Legendary Entity, who has a 20 percent stake. The commission is not voting to approve the designs.

“The vote is only to continue the process with the developer,” said Mayor Greg Brudnicki. “Our contract is with Sonnenblick. … He’s the main guy.”
A yes vote would give Sonnenblick the go-ahead to start working on feasibility studies and design work. Sonnenblick said he plans to spend several hundred thousand dollars in this next phase. Approval of that proposal also is dependent on what the feasibility studies find.

While the majority of commissioners gave the tentative designs a glowing review following the August meeting, Commissioner John Kady has been vocal about his reservations.

Instead of a “simple up and down vote,” he said he hopes to facilitate conversation about what commissioners and the public like and dislike about the proposed MarinaVillage to help guide the feasibility studies. “There has been a large outpouring of interest,” he said. “I hope we take the time to hear from each and everyone and have the opportunity to deliberate.”

Kady, for instance, has reservations about the “carnival” atmosphere that a games area in the center of the marina would create, worried it would be inconsistent with Panama City’s branding. He also has concerns about working with Legendary Entity, as the company has a “high risk,” with a low viability rating by financial consultants Dun & Bradstreet as well as ongoing lawsuits.

Kady had asked for a workshop prior to Tuesday’s meeting, but there was never “any consensus” among commissioners about having one, according to Brown.

Brudnicki said he prefers to wait to discuss the plans until after the feasibility studies, saying he “wanted to see what was feasible first” in order “to make sure if we put something out there, we can deliver it.”

Panama City leaders finally took steps forward with the city marina project at Tuesday’s Commission meeting. The developer, Sonnenblick Development LLC, presented commissioners with a rough outline of what the marina might look like when the project is complete.

“I was never satisfied with anything that we had looked at in the past and I see something here that’s going to be attractive, that’s going to lure people to come to our marina,” said Panama City Mayor Greg Brudnicki.

At the commission meeting, Sonnenblick presented city leaders with businesses that are already interested in investing.

“Marriott Corporation has come back to us and said they absolutely love this project,” said Sonnenblick Development LLC President Robert Sonnenblick.

The hotel would be around 160 to 175 rooms, geared toward families.

“Marriott came back very positive for this property and that is kind of our anchor tenant, if you will, for the project and we’re very excited about that,” said Sonnenblick.

Plans also show a row of water front restaurants.

“Big patios, overlooking the water and a very exciting group that will draw people to this project,” said Sonnenblick.

There was also talk about a water taxi shuttle, multiple parking garages, retail, and converting the city hall building into a family entertainment center.

“This creates an ambiance downtown that can release the potential of the rest of downtown,” said Brudnicki.

“We’re excited to have you guys interested in our property. Panama City and the St. Andrews area are a great place,” said Panama City Commissioner Mike Nichols.

Although commissioners are excited about these plans, nothing Sonnenblick presented is concrete quite yet.

“This is nothing but a plan view with stuff on it. Preliminary, and so there’s plenty of time for input and changes and that sort of thing,” said Panama City Commissioner John Kady.

Sonnenblick will be presenting the commission with hard numbers and plans at their November meeting.

Panama City commissioners move forward with early plans for city marina project

Incredibly compelling conversation about Westside hotel development and One Beverly Hills with Bob Sonnenblick from Sonnenblick Development at RENTV’s Aug 18th Westside of LA State of the Market Conference

PRESS RELEASE: Los Angeles, Calif. August 1, 2016
Hotel developer Bob Sonnenblick, Chairman of Sonnenblick Development LLC, has been chosen by RENTV/ RECG Conferences to moderate the L.A. Hotel Industry Update panel at the upcoming “Westside L.A. State of the Market” Conference on Thursday
August 18 at 8:30am at the DoubleTree Hotel in Culver City.

PROGRAM AGENDA:Bringing together major players in commercial real estate development to discuss their projects
and how to get projects built in the Greater LA area.

Los Angeles-based hotel developer Bob Sonnenblick, Chairman of Sonnenblick Development LLC, has been chosen by Rent TV Conferences Inc. to speak at their upcoming Greater LA Development Conference on the status of the L.A. County hotel market. Mr Sonnenblick will also discuss the firm’s new $80 Million USC Hyatt House Hotel, being developed by Sonnenblick SC LLC on the USC Medical Center Campus.

PANAMA CITY, Fla. (WJHG/WECP) – Some big changes could be coming to Downtown Panama City. On Wednesday, Panama City commissioners approved an agreement they believe will boost tourism in the city.

Improvements to the marina have been in the work’s for months, and now another new marina project could be on the horizon.

“The biggest things that are happening in North Florida from Pensacola to probably Jacksonville with this type of development and residential development is happening right here in Panama City,” said Commissioner John Kady.

Commissioners unanimously approved an exclusive agreement with California-based Sonnenblick Holdings at a specially called meeting.

If the plans move forward there’s a lot of exciting possibilities on the table for the marina including new hotels, hundreds of parking spots, new housing, a garage, and even a row of waterfront restaurants and shops.

“Whatever’s best to help revitalize,” said Panama City Mayor Greg Brudnicki. “We know that we need retail. We know that we need, you know, retail. We’d like to see retail downtown as far as on the marina, and a hotel, and more people living downtown.”

Over the next few months, Sonnenblick will develop a plan to overhaul the downtown Panama City Marina area. The agreement outlines several tentative ideas for development, such as thousands of square feet dedicated to retail and office space.

“We might be coming to you for two different hotels not just one and we are of the opinion that the more hotel rooms, the more tourism is generated for the downtown and will make the project that much bigger,” said Robert Sonnenblick, Chairman of Sonnenblick Holdings.

Mayor Brudnicki says if the company meets its deadlines, the city could break ground within a year. Commissioners say they’re excited to work with a team with such a high level of expertise.

“I call it an all star team of guys that have experience. They’ve done this before in other markets and there’s no substitute for experience,” said Commissioner Billy Rader

Mayor Brudnicki says the city would have to do some things to prepare, like increase water and sewer capacity, but he says they’ll make sure they meet those goals.

See on WGHG TV

As developer Robert Sonnenblick outlined plans for the Panama City Marina project, city commissioners could not stop saying how “impressed” and “excited” they were.

By KATIE LANDECK
News Herald Reporter

Posted May 11, 2016 at 11:01 AM
Updated May 11, 2016 at 5:07 PM

PANAMA CITY — As developer Robert Sonnenblick outlined plans for the Panama City Marina project, city commissioners could not stop saying how “impressed” and “excited” they were.

“I’ve met numerous developers,” Commissioner Billy Rader said. “This an A-team of people that have been assembled. … They have experience. They have done this before.”

During a special meeting Wednesday, the commission entered in an agreement to negotiate exclusively with California-based Sonnenblick Development Inc. for one year. City manager Jeff Brown called the agreement a “giant step forward,” as it could signal the end of the city’s year-and-a-half-long quest to find the right developer.

Real Estate developer Robert Sonnenblick, Chairman of Los Angeles-based Sonnenblick Development LLC has been added to the speaker list at the upcoming Bisnow Hotel Conference entitled BLIS-West (Bisnow Lodging & Innovation Series) to be held at the Sheraton Hotel in Downtown L.A. on April 28th at 9am.

Press Release: March 1, 2016-New York City, N.Y. IMN Conferences has announced that Mr. Robert Sonnenblick, Chairman of Los Angeles-based Sonnenblick
Development LLC will moderate the 4pm CrowdFunding panel at their upcoming March 10th conference at the Marriott Downtown Hotel in NYC.

Choosing the right platform for your deal

How to make sure your project can be sold

How much $$ can you raise?

CMBS defaults

Looking for bad actor partners

Technology guys vs. real estate guys

Portal senior management structure

Interstate deals: What does it take for a New York company to go over the George Washington Bridge and do a deal in New Jersey?

#602 – Hotel Development and Financing

Press Release: San Diego, Calif.-Feb.25, 2016

Crittenden Conferences Inc has announced that Mr. Robert Sonnenblick, Chairman of Los Angeles-based Sonnenblick Development LLC, has been chosen to moderate the Hotel Development and Finance panel at their upcoming Crittenden National Real Estate Conference in San Diego, California. The conference will be held at the Omni Hotel in Downtown San Diego.

The 150-room hotel is a design-build project, so the general contractor is an integral partner in the planning. A permitting meeting is set for Monday with Sacramento County and the development team, said Bob Sonnenblick, principal of Sonnenblick Development LLC of Los Angeles, the developer of the hotel.

Sundt is based in Tempe, Ariz., and it has nine offices in Arizona, California and Texas, including an office in South Natomas, just a few miles from the airport.

In the interim between its initial approval and now, Sonnenblick had a feasibility study done that found the hotel would do better with larger suites and more of them, so he added 15 rooms, including some as large as 650 square feet. Regular suites are about 450 square feet.

“We don’t want to be just a limited-service hotel. We want to get some higher-end clientele as well,” he said.

Construction will be a prevailing wage project and Sonnenblick has a handshake agreement to allow UNITE HERE Local 49, the hotel employees union, to represent the eventual hotel workers at the Hyatt Place, which could open in the summer of 2018. A groundbreaking is expected this summer, he said.

The airport would bring significant business to the hotel. Many flights out of Sacramento leave very early in the morning, so travelers from all over Northern California could use the hotel to arrive the night before traveling. Also, the hotel, like the airport, is right off Interstate 5, which can generate demand from auto travelers.

Another potential business for the hotel is air crew rooms. Many airlines have contracts that require them to house flight crews in nearby hotels.

A rendering for a Hyatt Place hotel proposed for Sacramento International Airport, which the developer now wants to expand to add more rooms.– Shimahara Illustration

Dec 4, 2015, 7:01am PST

The Hyatt Place hotel proposed for Sacramento International Airport will get more and larger rooms.

The 135-room project in January won approval from Sacramento County, which operates the airport. Developer Bob Sonnenblick recently won its approval to add 15 luxury suites to the property.

Sonnenblick, principal of Sonnenblick Development LLC of Los Angeles, said feasibility studies showed the hotel will do better with more rooms and the addition of the big suites.

The new design calls for 10 suites of 650 square feet, five junior suites and the original 135 suites, which are on average 450 square feet, he said. The five-story hotel will be wider, but not taller with the extra rooms.

Sonnenblick said he hopes to be under construction in the second quarter next year and then work through about 15 months of construction. That would put the opening of the new hotel in summer or fall of 2018.

Construction was to have started earlier this year, but Sonnenblick and his previous general contractor had a falling out on the project. Sonnenblick plans to name the new contractor later this month. Sonnenblick Development LLC will build, operate and own the hotel, which will be between the airport’s main commercial terminals. He said he has lined up construction financing.

The airport is a demand driver for the hotel. Many flights out of Sacramento leave very early in the morning, so travelers from all over Northern California could use the hotel to arrive the night before traveling. Also, the hotel, like the airport, is right off Interstate 5, which can generate demand from drivers. Another potential business for the hotel is air crew rooms. Many airlines have contracts that require them to house flight crews in nearby hotels.

Hyatt Place is a limited-service property. Locally, there are Hyatt Place properties in Davis, Rancho Cordova and Roseville.

Sacramento County has been seeking a hotel for more than a decade. The previous hotel at the airport, the Host Airport Hotel, was successful, but was demolished for the expansion of the airport’s new terminal and parking garage.

Nov 23, 2015 Patricia Kirk, ReporterAs the LA market continues to heat up across all sectors and with a fear of looming interest rate hikes, financing major developments has become a hot topic. For hotels, one of the hotter strategies is EB-5 funding.

San Francisco-based developer Sonnenblick’s principal, Bob Sonnenblick (pictured here with Athens Group COO Jay Newman), launched the discussion of hotel investment and development at Bisnow’s 3rd Annual LA Hospitality Boom event last week, discussing capitalization of an $80M hotel his company is developing on USC’s medical campus.

In financing the project, his firm put up 25% equity and secured a loan for 50% of the cost at 5% interest. But instead of filling the 25% equity gap with mezzanine money at 12% to 14%, his firm leveraged EB-5 funds at “an unbelievable 6%” rate, he says. “EB-5 money is a game changer,” Bob says. He noted EB-5 doesn’t work for everyone, as securing funding is a one-year process. “We had time to wait, because it took that long to get the project entitled,” Bob says. The program may not be available much longer; Congress is scheduled to consider a bill to limit it.

PERE Conference Corp. has announced that Los Angeles-based real estate developer, Mr. Robert Sonnenblick, Chairman of Sonnenblick Development LLC, has been chosen to moderate a real estate panel at their upcoming PERE Real Estate Summit in NY on November 11th, 2015.

The panel is titled: “The Cycle continues, a correction is inevitable…”.

Agenda

12:10As the cycle continues a correction is inevitable: Balancing investments for a future downturn
How are we factoring the anticipation into our investment strategy now? Will there be appreciation in both long/short term assets?

Real Estate Capital Magazine has announced that Los Angeles-based real estate developer Robert Sonnenblick, Chairman of Sonnenblick Development LLC, has joined the agenda for their upcoming Real Estate Capital Finance Forum to be held in NYC on Monday November 9th. Mr Sonnenblick will moderate the “Real Estate Cycle” panel. The conference will be held at the Convene Conference Center on Third Avenue, and will begin at 8am. Conference Registration is available at (646)-854-7950.

3:45 Panel session

Hear from the borrowers: where are we in the real estate cycle?

Where are the greatest opportunities for borrowers in the US market today?

Sector focus: what’s next? Will a focus on multi-family that drove the post-crash recovery shift to hospitality/retail/office/industrial?

Bisnow/BLIS Hotel Conference – Washington DC

Oct 20, 2015

While Bill and Debbie were the highlight of the day, the 400 or so attendees were treated to a Sheila Johnson keynote and state of the hotel industry, covered yesterday. In the afternoon, the crowd was given an update on EB-5 financing from a panel of Polsinelli’s Dawn Lurie, Wright Johnson’s Aaron Goforth (he’s the one with the man-bun), Sonnenblick Development CEO Bob Sonnenblick, EB5 Capital founder Angel Brunner, who moderated in the style of Anderson Cooper, Homeier & Law’s Clem Turner, and NES Financial’s Reid Thomas. EB-5 is a vehicle for immigrants to invest in real estate. It’s a convoluted and complicated process, but it can be worth it. “The bottom line is always money,” Bob says. “The EB-5 mezzanine deal we just finished was at 6%. If you’re able to borrow mezz money at 6 instead of 12% to 13%, it’s going to save you millions of dollars over your transaction.”

The now legendary lone fir stands out amid the rolling landscape of the links style golf course at Chambers Bay. An 18-hole golf course and a large resort-hotel are no longer planned for Chambers Bay in University Place. Instead, Pierce County officials have asked the California developer behind the project for a smaller development. Dean J. Koepfler Staff file

By Brynn GrimleyStaff writer

An 18-hole golf course and a large resort-hotel are no longer planned for Chambers Bay in University Place.

Instead, Pierce County officials have asked the California developer behind the project for a smaller development.

“We didn’t feel from a county perspective that it was realistic to have a development predicated on the building of a new golf course,” deputy county executive Kevin Phelps said last week.

The county’s request came after the U.S. Open in June.

The space the USGA tournament took up outside the county-owned Chambers Bay golf course made county officials realize a second golf course didn’t make sense, Phelps said.

Plans included a 258-room hotel, conference center, 180-seat cafe and restaurant, and a swimming pool. The conference center was proposed for what now is the county’s environmental services building, with a ballroom added on.

“We have redone our feasibility studies and appraisals to divide this hotel development into two phases,” Sonnenblick wrote, “the first of which will be approximately half the size of what we had planned before.”

Sonnenblick expects to have new project renderings to the County Council soon.

“We are very excited about how the new, smaller, hotel layout sits (on) the land parcel and how well it works with the site’s current long-term master plan,” he said.

The county’s decision to request a scaled-back development was “partially economic and partially making sure that we have the ability to use that property for a variety of uses,” Phelps said.

After seeing architectural drawings for the hotel a year ago, at least two County Council members cited concern with impeding the public’s ability to access the site.

Public amenities include trails, parks and playground as well as the golf course.

“That is the public’s property,” Councilwoman Connie Ladenburg said at the time. “To make sure that (residents) still feel that that’s their property, I think, is very key with any development that we do out there.”

Sonnenblick maintains he will develop a project that promotes pedestrian accessibility to the site.

BOB SONNENBLICK
ChairmanSonnenblick Development, LLC

Mr. Robert Sonnenblick, Principal of Sonnenblick Development, LLC, is a graduate of the Wharton School of Finance of the University of Pennsylvania with more than 30 years of experience in various aspects of real estate development and real estate finance. From 1981 to 1991 Mr. Sonnenblick was the driving force and power behind Sonnenblick-Goldman Corporation of California. Mr. Sonnenblick completed over $1.5 Billion of commercial real estate transactions on the West Coast, and as a result is regarded as one of the West Coast’s leaders in the field of commercial real estate finance. Among the more notable projects for which Mr. Sonnenblick personally structured the financing for are The Beaudry Center, Los Angeles, California ($197 million), the Ritz Carlton Hotel, Pasadena, California ($97 million), One Waterfront Plaza, Honolulu, Hawaii ($100 million), and the Los Angeles World Trade Center, Los Angeles, California ($55 million).

In 1991 Mr. Sonnenblick was appointed Director of Development for the New Jersey and L.A. MetroMalls, with the responsibility for oversight and direction of the design, financing, and leasing programs for two proposed $250 million enclosed regional malls totaling 1.2 million square feet each. Mr. Sonnenblick personally oversaw more than 1 million square feet of leases in connection with this position as well as arranging the necessary debt and equity financing. The New Jersey project opened to one of the strongest starts in the history of the United States mall industry. It is now re-named Jersey Gardens Outlet Mall.

In addition, Mr. Sonnenblick was an original development partner of the Loews Santa Monica Beach Hotel. This 360-room, $90 million hotel was sold for $125 million.
Prior to forming Sonnenblick Development LLC, Mr. Sonnenblick was the senior partner in a Los Angeles-based real estate development firm (Sonnenblick Del Rio Development) which specialized in P-3 public-private partnerships, specifically the development of four government leased office buildings across the Los Angeles basin. During his tenure there as Chairman, Mr. Sonnenblick successfully developed nearly 1 million square feet of government-leased buildings, occupied by such tenants as U.S. Department of Homeland Security, the Federal Bureau of Investigation (FBI), the Los Angeles County Sheriffs Department, Los Angeles County Department of Public Social Services, The Small Business Administration (SBA), the LA County Mental Health Dept, The Social Security Administration, and Los Angeles County Department of Children and Family Services.

Mr. Sonnenblick is a frequent speaker and panelist at various real estate-related functions, such as those hosted by Deloitte Touche, ICSC, Value Retail News, Bloomberg News, Crittenden Conference Co., USC Real Estate, UCLA Real Estate, IMN Real Estate Conferences, Bisnow Media, Opal Conference Group, iGlobal Forum, and the Institute for International Research. Mr. Sonnenblick is a published author on subjects ranging from commercial architecture to general real estate market conditions. In addition to Mr. Sonnenblick’s expertise in development, finance, and joint ventures, Mr. Sonnenblick has also been certified as an expert witness in the areas of real estate bankruptcy/foreclosure and finance. Mr. Sonnenblick is a qualified expert witness on the topic of Commercial Real Estate Interest Rates and Finance for the United States Federal Court System in numerous different jurisdictions across the State of Calif, Nevada, and Arizona.

The Lodging Conference, one of the nation’s premier Hotel Industry annual events, is pleased to announce that Los Angeles-based hotel developer Bob Sonnenblick, Chairman of Sonnenblick Development LLC, has agreed to join the “EB-5 and Crowdfunding” panel at their upcoming conference on October 7th at The Arizona Biltmore Hotel in Scottsdale, Arizona. The panel will focus on alternative methods to fund new hotel projects and acquisitions.

Learn how EB-5 and crowdfunding work as the panel reviews the benefits and pitfalls including legal, regulatory and legislative issues, fees, risk, marketing and timeline to meet your fundraising goal for new construction, acquisition or renovation.

NY-based IMN Real Estate Conferences is pleased to announce its 2nd Annual Crowdfunding Forum for Real Estate, to be held on September 17th at the Fairmont Miramar Hotel in Santa Monica.

The lead panel will be moderated by Los Angeles developer Bob Sonnenblick, Chairman of Sonnenblick development LLC, and it will focus on:
The Future of Crowdfunding as a Money Source for Real Estate Projects.
For more info, go to www.IMN.org or call (212)-224-3207.

9/17 12:15 PM The Future of Real Estate Crowdfunding… How Scalable is it?

Who will be the real players in 2 years

With all this portal $$ floating around is scalability now a closer reality?

Portal growth in numbers… How many actual players are out there? How many pretenders?

Will banks and other established lenders buy the portals and the knowledge/ technology?

Bob Sonnenblick, Chairman of Los Angeles-based Sonnenblick Development LLC, has been chosen by Bisnow Conferences to be one of the lead panelists at their upcoming 4th Annual Lodging & Investment Conference in Washington DC on October 19.

Los Angeles-based real estate developer Bob Sonnenblick has joined the Real Estate Finance panel at the upcoming CFO Forum Conference in San Diego on May 4th. The conference is run by IMN Conferences Inc and will be held at The Park Hyatt Aviara Resort in Carlsbad. The topic of Sonnenblick’s panel is “Real Estate Fundraising: Navigating Different Sources of Capital”.

10:00 AM Fundraising: Navigating Different Sources of Capital

From Foreign, Commercial Banks, Funds, Mezz, weigh various costs and benefits associated with different sources of capital.

Hotel developer Bob Sonnenblick, Chairman of Los Angeles based Sonnenblick Development LLC, has been chosen by Crittenden Conferences Inc. to moderate its “California Real Estate Development – 2015” panel at the upcoming Crittenden National Real Estate Conference in San Diego, California.

The conference will be held at The S.D. Omni Hotel, next door to The San Diego Convention Center, on April 28-30, 2015.

County votes to approve Hyatt Place at Sacramento airport

$24 million hotel would have 135-room capacity

By Leticia Ordaz

SACRAMENTO, Calif. (KCRA) —The Sacramento County Board of Supervisors voted 5-0 on Tuesday to approve a planned $24 million hotel at the Sacramento International Airport — and it’s expected to bring hundreds of new jobs to the region.

The hotel will be funded by a developer who is planning on building a five-story, 135-room Hyatt Place.

Los Angeles-based Sonnenblick Development is proposing to put a Hyatt hotel in a grassy area next to a parking garage, an open space between the airport’s two terminals.

“(It will be) very easily accessible from Terminal A and Terminal B,” said Robert Sonnenblick, with Sonneblick Development. “You fall out of baggage claim right into our lobby.”

The project will start this spring and generate about 300 construction jobs in the next two years.

Airport travelers are excited already.

“It’s a good thing for Sacramento,” Sydney Dawes said Tuesday. “Growth is great.”

SACRAMENTO, Calif. (KCRA) —The Sacramento County Board of Supervisors voted 5-0 on Tuesday to approve a planned $24 million hotel at the Sacramento International Airport — and it’s expected to bring hundreds of new jobs to the region.

The hotel will be funded by a developer who is planning on building a five-story, 135-room Hyatt Place.

Los Angeles-based Sonnenblick Development is proposing to put a Hyatt hotel in a grassy area next to a parking garage, an open space between the airport’s two terminals.

“(It will be) very easily accessible from Terminal A and Terminal B,” said Robert Sonnenblick, with Sonneblick Development. “You fall out of baggage claim right into our lobby.”

The project will start this spring and generate about 300 construction jobs in the next two years.

Airport travelers are excited already.

“It’s a good thing for Sacramento,” Sydney Dawes said Tuesday. “Growth is great.”

An existing hotel was torn down more than six years ago to make room for the new Terminal B. The recession stopped plans for a new hotel at that time.

The economic revival doesn’t stop with the hotel.
Construction crews got an early start Tuesday morning at Bonney Field, the home of Sacramento Republic FC. The team is spending $1.6 million of its own money to expand the stadium’s seating from holding about 8,000 to now 11,000 fans at the Cal Expo site.

The project will send a strong message to Major League Soccer, a Sac Republic spokeswoman said.

“To show them that we can grow to a threshold of 11,000 — and then maybe as high as 14,000 in the future — (it) really shows that there is a demand and a market here in Sacramento,” Erika Bjork told KCRA 3.

Sacramento is among the cities in the running for MLS’s 24th and final franchise. Officials expect the league to make an announcement on expansion plans by June.

“We’re standing where we’ll probably have about 4,000 to 4,500 additional seating in the bleacher section — our most ardent and passionate supporters — our supporters including Tower Bridge Battalion,” said Bjork while showing KCRA 3 around on Tuesday.

Macy’s will also receive tax incentives to set up a warehouse at the former Campbell’s site. The online distribution center for wedding gifts and other goods will generate as many as 350 jobs.

“The warehousing jobs usually average $15 to $20 an hour, which is competitive for our area,” said Troy Givans, the Sacramento County director of economic development.

The worksite for the newly renamed Capital Commerce Center will become a magnet for new jobs.

Jan. 27–Travelers to and from Sacramento International Airport soon will have a place to stay overnight on airport property, although not as grand as once planned.

Sacramento County supervisors Tuesday morning approved a new five-story airport business hotel, seven years after tearing down a smaller one.

The county will team with developer Sonnenblick Industries LLC to construct a 135-room Hyatt Place within walking distance of both airport terminals. The hotel will include an indoor pool and spa, fitness room, dining area and 3,500 square feet of meeting space.

Sonnenblick, a Southern California developer, has built hotels adjacent to medical facilities, but company principal Bob Sonnenblick said this is the first of what he hopes will be several airport hotels his company will develop in the next few years.

The hotel will sit on a triangle of grass adjacent to the north side of the parking garage between the airport’s two terminals. Sonnenblick and airport officials say the hotel will be a major amenity for travelers from around Northern California who want to stay overnight before an early morning flight. The hotel also likely will serve business people and those visiting the Capitol on business.

Sonnenblick said the location on airport grounds should allow his company to charge a premium room rate. He estimated an average night at the hotel would cost $150.

“The advantage we have is that the costumer does not have to get into a minivan and drive 10 to 15 minutes each way to stay at a hotel,” he said. “Our hotel, you literally walk out of baggage claim and into our front door.”

The hotel represents a success for airport officials, who are trying to add amenities and promote their facility as a premier Northern California airport. It is a comedown, though, from what airport officials planned a few years ago. Originally, the new hotel was to be a high-rise built directly on top of the new Terminal B, allowing hotel guests to go from room to plane without stepping outside. The hotel’s lobby would have opened directly onto the terminal ticketing area.

But that plan proved too costly, and was shelved during airport construction. Sonnenblick later explored the possibility of building two hotels elsewhere on airport grounds, one upscale with extensive meeting and ballroom space, the other more modest. Marketing studies, however, determined the upscale hotel would not pencil out, he said.

The proposed hotel will, however, be larger and better appointed than the former Host Airport Hotel, he said. “We are going to build this beautifully.”

The project has been delayed by a flood-related federal moratorium on most new construction in the Natomas basin. But those restrictions are expected to be removed in May or June, and Sonnenblick said his company will be ready immediately to submit project plans to the county for approval.

Sonnenblick expects to spend about $24 million building the hotel, which is expected to open in late 2017.

The developer will pay the airport a one-time fee of $2.46 million for use of 164 ground-floor spaces in the parking garage for guest parking. Sonnenblick will also pay the airport a minimum of $900,000 in total rent across the first four years: $150,000 annually in the first two years and $300,000 annually in the next two years. Thereafter, rent payments will be based on a percentage of hotel gross revenue, estimated at $475,000 in the fifth year.

Sonnenblick has told the county it intends to enter into a “labor harmony agreement” with UNITE HERE Hotel & Restaurant Employee Union Local 49 when hiring workers to operate the hotel, according to a staff report.

Sacramento County supervisors Tuesday morning approved a new five-story business hotel at Sacramento International Airport, seven years after tearing down the old facility.

Supervisors voted 5-0 to work with developer Sonnenblick Industries LLC to construct a 135-room Hyatt Place within walking distance of both airport terminals. The hotel will include an indoor pool and spa, fitness room, dining area and 3,500 square feet of meeting space.

Sonnenblick has told the county it intends to enter into a “labor harmony agreement” with UNITE HERE Hotel & Restaurant Employee Union Local 49 when hiring workers to operate the hotel, according to a staff report.

The developer will pay the airport a one-time fee of $2.46 million for use of 164 ground-floor spaces in the parking garage for guest parking. Sonnenblick will also pay the airport a minimum of $900,000 in total rent across the first four years: $150,000 annually in the first two years and $300,000 annually in the next two years. Thereafter, rent payments will be based on a percentage of hotel gross revenue, estimated at $475,000 in the fifth year.

Though they support building a new airport hotel, some supervisors were not impressed Tuesday with the first drawing of the Hyatt Place hotel, telling staff that they want to review the structure’s design in the future.

“It really benefits the people within our primary region,” said Sacramento County’s airport director, John Wheat. “A region all the way up to Redding, within 100 miles of this airport. It is our primary airport where a lot of our passengers come from.”

An existing hotel was torn down more than six years ago to make room for the new Terminal B and the recession stopped plans for a new hotel at that time.

The new terminal, which cost roughly $1 billion, has left the airport in debt and forced budget cuts.

Wheat said a new hotel, in addition to giving travelers a convenient place to stay, would also bring in new money.

“Everything helps, I mean, it’s a revenue,” Wheat said.

The $24 million in construction costs would be paid by the developer, who would pay the airport about $2.5 million up front, and several hundred thousand dollars a year to lease the property.

On Friday, some travelers said a new hotel would make traveling more convenient for out-of-town visitors and for travelers from around Northern California.

“If you’re leaving on a long trip and have a very early departure, that might be a good idea,” said Neil Robinson, who said he lives in Folsom.

See also:

Video Transcript

INTERVIEW WITH SABRINA RODRIGUEZ RIGHT NOW ON KCRA.COM. PLANS ARE MOVING FORWARD TO BUILD A HOTEL AT SACRAMENTO INTERNATIONAL AIRPORT. IF COUNTY LEADERS APPROVE THIS PLAN, THE HOTEL WOULD BE BUILT HERE IN THIS GRASSY AREA BETWEEN TERMINAL A AND TERMINAL B. AND THE NEW HYATT PLACE HOTEL WOULD LOOK LIKE THIS. KCRA 3’S SHAROKINA SHAMS IS LIVE AT THE AIRPORT AND THESE PLANS AREN’T REALLY NEW. NOW IT LOOKS LIKE IT WILL HAPPEN. THAT’S RIGHT. THESE PLANS HAVE BEEN A LONG TIME IN THE MAKING. WE CAN TAKE A LOOK OUTSIDE OF THE WINDOWS AND GIVE YOU A LOOK AT THE SITE BEHIND ME LOOKING OUT THE WINDOWS OF THE BACK OF TERMINAL B. THE HOTEL WOULD GO WHERE THAT ART WORK SITS OUTSIDE A PARKING GARAGE. IT COULD MEAN A MUCH-NEEDED FINANCIAL BOOST FOR A COUNTY AIRPORT THAT HAS A LOT OF DEBT. DUSTIN BILTON IS VISITING SACRAMENTO TODAY WITH HIS 18-MONTH-OLD SON. NORMALLY, HE’S HERE ON BUSINESS AND LIKES THE IDEA OF A HOTEL AT SACRAMENTO INTERNATIONAL AIRPORT. FOR ME AS A MANAGER, IF I WANT TO HOST A MEETING HERE, IT GIVES ME ANOTHER OPTION, TOO. FOR ANOTHER REASON THAT WE WOULDN’T GO TO SAN FRANCISCO. IT WOULD GIVE SACRAMENTO ANOTHER OPPORTUNITY. THIS ART SHOWS WHAT HYATT IS PLANNING — A NEW, 135-ROOM HOTEL LIKE THIS HYATT PLACE HOTEL WHICH WAS BUILT IN ROSEVILLE, NEAR THUNDER VALLEY CASINO FIVE YEARS AGO. EVERYBODY’S GOING TO HAVE JOBS. IT’S KIND OF A PEBBLE IN THE WATER, IT GOES OUT FROM THERE. AN EXISTING HOTEL HERE WAS TORN DOWN SIX YEARS AGO TO MAKE ROOM FOR THE NEW TERMINAL B. WITH A COST OF $1 BILLION, THIS TERMINAL HAS ALSO BROUGHT DEBT TO THE AIRPORT AND FORCED BUDGET CUTS. BUT A NEW HOTEL, SINCE IT WOULD BE PAID FOR BY THE DEVELOPER, COULD HELP PUT A DENT IN THAT. HYATT WOULD PAY THE AIRPORT $2.5 MILLION UP FRONT AND THEN SEVERAL HUNDRED THOUSAND DOLLARS A YEAR TO LEASE THE PROPERTY. JOHN WHEAT IS THE COUNTY’S AIRPORT DIRECTOR. EVERYTHING HELPS. I MEAN, IT’S A REVENUE. IT REALLY BENEFITS THE PEOPLE WITHIN OUR PRIMARY REGION, A REGION ALL THE WAY UP TO REDDING, YOU KNOW, WITHIN 100 MILES OF THIS AIRPORT. THERE WERE PLANS FOR A NEW HOTEL AS TERMINAL B WAS GOING UP, BUT THEY WERE SCRAPPED BECAUSE OF THE RECESSION. TODAY THOUGH, IT WASN’T JUST FAR-AWAY TRAVELERS WHO TOLD US THEY’D STAY IN A HOTEL HERE. NEIL ROBINSON LIVES IN FOLSOM. IF YOU’RE LEAVING ON A LONG TRIP AND HAVE A VERY EARLY DEPARTURE, THAT MIGHT BE A GOOD IDEA. IN CASE YOU’RE CURIOUS, HYATT IS SET TO SPEND $24 MILLION BUILDING THE HOTEL. THIS ISN’T A DONE DEAL UNTIL THE COUNTY BOARD OF SUPERVISORS APPROVES IT. THEY’RE SET TO CONSIDER IT AT THEIR MEETING NEXT WEEK.

A $23 million Hyatt Place hotel proposed for Sacramento International Airport could be open in 2017.

This rendering depicts a Hyatt Place hotel proposed for Sacramento International Airport. It could be open in 2017, if Sacramento County approves a development agreement.Shimahara Illustration

Sacramento County supervisors at their meeting Tuesday will consider a development agreement with Los Angeles-based real estate development firm Sonnenblick Development LLC to build a 135-room hotel between the airport’s main commercial terminals. The hotel would feature indoor pool and spa, fitness room, a dining area and 3,500 square feet of meeting space.

Hospitality company Sonnenblick-SMF LLC would develop and operate the hotel, paying the county a fixed fee of $900,000 though the first four years of operations, and then a percentage of gross revenue. That scale would be 5 percent from years five through 19, 6 percent in years 20 through 39 and then 7 percent of gross in years 40 through 50.

The developer also would pay a one-time fee of $2.5 million to use 164 spaces in the airport’s parking garage.

“Our customers have requested the convenience of an onsite hotel for many years and we are now at a point where we are ready to move forward,” said Sacramento County Airport System director John Wheat.

If approved, construction could begin by June, when federal flood map building restrictions on the Natomas Basin are lifted.

A $23 million Hyatt Place hotel proposed for Sacramento International Airport could be open in 2017, if Sacramento County approves a development agreement. This is the site.Sacramento County Department of Airports

Hyatt Place is a limited-service property. Locally, there are Hyatt Place properties in Davis, Rancho Cordova and Roseville.

Sacramento County, which operates the airport, has been seeking a hotel for more than a decade. The previous hotel at the airport, the Host Airport Hotel, was successful, but the small hotel was demolished for the expansion of the airport’s new terminal and parking garage.

Sonnenblick-SMF LLC would negotiate a contract with the UNITE-HERE Local 49, the local hotel and restaurant employees union. The previous hotel had been a union shop.

The county says if the Hyatt Place is successful, a second hotel is possible.

The airport is a demand driver for the hotel. Many flights out of Sacramento leave very early in the morning, so travelers from all over Northern California could use the hotel to arrive the night before traveling. Also, the hotel, like the airport, is right off Interstate 5, which can generate demand from drivers. Another potential business for the hotel is air crew rooms. Many airlines have contracts that require them house their flight crews in nearby hotels.

SACRAMENTO (CBS13) – A Los Angeles developer is looking to build a hotel at the Sacramento International Airport, county officials announced Friday.

Airport officials will be meeting the Sacramento County Board of Supervisors come Tuesday for approval of the plan. Sonnenblick Development LLC and the Sacramento County Dept. of Airports reportedly have an agreement to build a 5-story, 135 room Hyatt Place hotel next the parking garage at the airport.

“Our customers have requested the convenience of an onsite hotel for many years and we are now at a point where we are ready to move forward,” said Director of Airports John Wheat in a release.

Officials have been looking to build a hotel at the airport since Host Hotel was demolished in 2008 to make room Terminal B.

If the new hotel plan is approved, construction could begin as early as June 2015 and the hotel would open in 2017, airport officials say.

The Sacramento County Board of Supervisors will decide Tuesday whether to approve an agreement that will allow a five-story hotel to be built at the Sacramento International Airport.

The Sacramento County Department of Airports will go before the board on Jan. 27 to request approval of an agreement with a developer to build a long-sought onsite hotel at the airport. The Sacramento County Department of Airports is responsible for planning, developing, operating and maintaining the county’s four airports: Sacramento International Airport, Executive Airport, Mather Airport and Franklin Field.

Sonnenblick Development LLC has proposed building five-story, 135-room Hyatt Place hotel with an indoor pool and spa, fitness room, dining area and 3,500 square feet of meeting space.

The Los Angeles-based developer plans to lease a 1.4-acre site adjacent to the parking garage for construction of the hotel, as well as 164 spaces on the ground level of the garage. The hotel would be accessible to passengers of both terminals.

Construction could begin as early as June 2015, when federal building restrictions on the Natomas Basin are expected to be lifted. In that scenario, the hotel would open in 2017 or 2018.

Sonnenblick has agreed to invest at least $23 million to build the facility. The Department of Airports will receive a one-time payment of $2.46 million for the use of the parking garage spaces. Rent for the hotel site will be fixed for the first four years for an amount totaling $900,000. In subsequent years, rent will be paid as a percentage of gross revenue.

An in-terminal hotel was in the works for the new Terminal B but was removed from plans due to the economic downturn. Airport staff performed a site analysis and in 2011 issued a Request for Proposals for hotel development. Sonnenblick responded to the RFP with a proposal to develop two hotels. If the Hyatt Place is successful, a second hotel is a possibility.

The onsite Host Hotel was demolished in 2008 to make room for Terminal B construction. Under the agreement going to county supervisors this week, Sonnenblick LLC would pay for construction and assume the financial risk associated with owning and operating the hotel.

Sacramento International Airport is seeking approval for plans to build a five-story, 135-room hotel onsite.

A Los Angeles-based developer is proposing to build a Hyatt Place hotel near the parking garage, with access to both terminals. Plans include an indoor pool and spa, fitness room, dining area and 3,500 square foot meeting space.

The Sacramento County Department of Airports will take their plan to the Board of Supervisors on Tuesday.

If approved, construction could begin this summer when building restrictions in the Natomas area are expected to be lifted. It could take more than a year to build the hotel.

An onsite hotel was demolished almost six years ago to make room for the new Terminal B. The new plans have the developer,

This rendering depicts a Hyatt Place hotel proposed for Sacramento International Airport. It could be open in 2017, if Sacramento County approves a development agreement.Shimahara Illustration

Seven years after tearing down the old airport hotel, Sacramento International Airport has reached a deal with a private developer to build a new facility on site – a five-story hotel that will sit within short walking distance of both passenger terminals.

The deal, years in the making, will provide airport customers with a privately built 135-room Hyatt Place. The hotel will include an indoor pool and spa, fitness room, dining area and 3,500 square feet of meeting space.

Airport director John Wheat called the hotel deal a double bonus, returning a major passenger amenity to airport grounds and providing a needed income boost. Airport officials have sought ways to boost revenue to pay down a $1 billion debt load from the recent construction of a new terminal and passenger concourse building.

“It is definitely a nice convenience to our passengers,” Wheat said. “We look at it as a customer service. And, secondly, it generates additional revenue to the airport system.”

The developer, Sonnenblick Industries LLC of Southern California, has been negotiating for two years with the county on the deal. Sonnenblick , the sole company to respond to the airport’s request for proposals, specializes in government buildings but has built a number of hotels and increased its hotel development in recent years.

The airport tore down the previous on-site hotel in 2008 to make room for Terminal B. Officials had originally planned to build a new hotel several years ago as part of the Terminal B expansion project, but were forced to eliminate it as a cost-saving move during the recession.

Until recently, the airport and other Natomas-area landowners have been unable to build new structures because of a de facto building moratorium until flood improvement funding was authorized. That moratorium appears ready to be lifted this spring or summer.

Airport officials will present the deal to the county Board of Supervisors on Tuesday for approval.

According to a staff report for that meeting, Sonnenblick will build the hotel on a 1.4-acre site it will lease from the airport next to the parking garage. The developer will pay the airport a one-time fee of $2.46 million to use 164 ground-floor spaces in the garage for guest parking.

The company also will pay the airport an annual $900,000 in rent for the first four years. In year five and beyond, the rent will be set at a percentage of hotel gross revenue, estimated to be about $475,000 in year five.

The hotel construction cost, to be borne by Sonnenblick, is expected to be about $24 million. Construction is expected to take two to three years.

The hotel site will be on a triangular grassy area, currently unused, at the north end of the parking garage.

Todd Quam | Digital Sky Aerial ImagingIn a major step forward for Sacramento International Airport, county supervisors on Tuesday will consider a development agreement for a 135-room Hyatt Place hotel to be built between the two passenger terminals.

In a major step forward for Sacramento International Airport, county supervisors on Tuesday will consider a development agreement for a 135-room Hyatt Place hotel to be built between the two passenger terminals.

Sacramento County, which operates the airport, has been seeking a hotel for more than a decade. The previous hotel at the airport, the Host Airport Hotel, was successful, but the small hotel was demolished for the expansion of the airport’s new terminal and parking garage.

The five-story hotel would be just north of new parking structure at the airport, between the two commercial airline terminals.

Hospitality company Sonnenblick-SMF LLC would develop and operate the hotel, paying the county a fixed fee of $900,000 though the first four years of operations, and then a scale of percentage of gross revenue. That scale would be 5 percent from years five through 19, 6 percent in years 20 through 39 and then 7 percent of gross in years 40 through 50.

Hyatt Place is a limited-service property. Locally, there are Hyatt Place properties in Davis, Rancho Cordova and Roseville.

Sonnenblick-SMF LLC would negotiate a contract with the UNITE-HERE Local 49, the local hotel and restaurant employees union. The previous hotel had been a union shop.

PUNTA CANA, Dominican Republic—Buyers are laboriously prudent when it comes to hotel assets in the Caribbean, and speakers at last week’s Caribbean Hotel Investment Conference & Operations Summit agreed the process isn’t going to be any more fluid in the foreseeable future.

The biggest issue is easy to spot, panelists said. Despite strong performance fundamentals for the region’s hotel industry, lenders are reluctant—and in a number of cases unable—to throw their hats in the ring when it comes to deals.

“The performance numbers aren’t translating into the availability of capital,” said Gary Brough, managing director of KPMG, during the “Capital and the new normal” general session.

“Right now there is a ton of money going into the hotel business in the (U.S),” said Bob Sonnenblick, principal of Sonnenblick Development. “It’s going to take time to trickle down here.”

Adam Rosenberg (right) of Fortress Investment Group and Gary Brough (center) of KPMG react to a comment from Bob Sonnenblick of Sonnenblick Development during the -Capital and the New Normal- session at last week’s Caribbean Hotel Investment Conference – Operations Summit. (Photo: Jeff Higley) –

“The good and the bad of the region is oftentimes the absence of senior debt, or if there is senior debt you’re talking about 50% equity,” added Nick Hecker, senior principal at Och-Ziff Real Estate.

Bill Sipple, executive managing director of HVS Capital Corporation, said it’s difficult to source capital for the Caribbean, but cracks in the armor are starting to appear. He said one bright spot is U.S. commercial mortgage-backed securities lenders, which are starting to show an interest in the region.

“They’re seeking ways of finding new avenues that are less competitive and where they can get higher yields,” Sipple said.

Lorne Bassel, president and CEO of Crave Real Estate, said during the “Investor/capital provider outlook” general session that investors who have a clear intent to stay in the deal for the long run are more apt to obtain financing.

“(Lenders) want to see a compelling vision in the plan that makes your project different,” Bassel said. “Marina, golf and beach just isn’t enough. They want to see you bought in financially for the next 10 years.”

But Ali Elam, managing director of Fortress Investment Group, said there’s a simple reason large banks aren’t lending into the Caribbean: “They simply do not have the facility to make loans in the Caribbean. It’s not something they invested in infrastructure for.”

Another issue is rating agencies don’t have coverage in all 32 countries in the Caribbean, Elam said.

The obvious lack of capital creates a shallow deal environment in the region.

George Spence, principal of Leading Property Group, said while some deals have been completed during the past 18 months, it’s going to take at least that long for the flow to increase.

“The Caribbean is 18 to 24 months behind the U.S. in terms of capital and new deals going on,” he said.

Spence noted several key transactions in the Caribbean during 2013 and 2014, including the former Ritz-Carlton Rose Hall in Jamaica that sold to Playa Hotels & Resorts for $70 million and rebranded as the Hyatt Zilara Beach, and the 105-room One & Only Ocean Club in the Bahamas that was sold to Access Industries for a reported $1 million per room.

Interest is building
There is growing interest in acquiring hotels in the region from players such as Fortress Investment, according to managing director Adam Rosenberg. But a deal would have to meet certain criteria for the company to make an acquisition.

“There’s a paradox,” Rosenberg said. “The world seems awash in capital … yet it’s very hard to find a deal from a return perspective. It’s hard to find things that are the right fit. (The Caribbean is) off the radar for a lot of capital providers.”

Sipple said the appetite for projects in the Caribbean tend to be in the $30-million to $100-million range.

“It doesn’t have to be a mega deal to get interest,” Sipple said. “There’s a lot of non-resort type of properties that can be built here. There’s a need for them.”

“If you’re going to spend the time to put capital out, you might as well do a large project,” Sonnenblick said, acknowledging that select- and limited-service properties have a place at airports in the region.

Elam said Fortress’ acquisition of the debt on the Westin Grand Cayman Seven Mile Beach Resort and its refinancing of the Aruba Marriott Resort is proof the company thinks the recovery in the Caribbean will continue. The two deals combined equated to a $470-million investment he said.

“Investment in the Caribbean will always be a deep pocketed investment game, knowing that eventually you’ll have an investment that’s unique,” Elam said.

Help from governments go a long way
Panelists agreed that some of that investment should be offset by governments that want to attract development and capital infusion into their countries.

A prime example of that is the Dorado Beach, A Ritz-Carlton Reserve, in Puerto Rico, according to Kenny Blatt, principal and COO for CPG Real Estate, which owns the property.

“Government participation allowed us to slog through three or four tough years,” Blatt said during the “Hospitality Leaders Outlook” panel.

The $1,200 to $1,300 average daily rate for the property has given CPG reason to develop the other 1,400 acres of land around the project, according to Blatt. The company refinanced Dorado Beach on Wednesday with Och-Ziff providing the financing.

“It gives us liquidity to build real estate, including hopefully building a second hotel site,” Blatt said.

The effects an active government can have on resort development and transactions aren’t always visible, speakers said.

“When people talk about cash flows and returns on a project, the first question I have is always, ‘What is the tax impact?’” Hecker said.

There’s also a difference between strategic investment and economic investment in the Caribbean, panelists said.

“The most strategic investor is generally the government,” Sonnenblick said. “I’m surprised there isn’t more going on in the Caribbean where the government is doing more.”

John Keith, managing director for Caribe Hospitality, said policies of some of the Caribbean governments, especially the foreign exchange rates, make it difficult for the hotel industry to be successful.

“I would challenge the governments to review their policy,” he said, adding they must understand they are competing in a world full of alternatives.

Bob Sonnenblick panelist at Hotel Summit on November 11th, 2014 in Los Angeles

Hotel Summit on Tuesday November 11th 2014

Sonnenblick Development principal Bob Sonnenblick, a panelist, says LA just finished its best 12 months ever in total volume of hotel bookings and tourism, and supply is under control. In general, the coasts are very strong but the middle of the country is still fairly flat. He’s 100% concentrated on new development, but his biggest problem is that there is no land left in LA. (It’s why Katy Perry is always Walkin’ on Air.)

Our moderator, Arent Fox’s Rich Brand, asked panelists about hotel chains launching new brands and categories. Brian says the demographic he’s pursuing doesn’t value a big flag, and he notes independent hotels weathered the downturn along with their bigger cousins. Maki says loyalty points matter to Baby Boomers and Gen X, but a large portion of Millennials are brand-agnostic. Bob says there are certain locations where you might be better off without a big brand if there’s an external room generator you can use instead (think beaches or convention centers). In addition, construction lenders now are more open to projects without a brand.

Rich says he’s seeing a lot of deals for limited and select-service hotels, and fewer full-service ones being built. Bob says the former have a higher profit margin because you don’t have a big spa, room service or gobs of meeting space. “It’s a rooms-only box.” Brian says the debt and equity markets love limited service because they view it as less risky. For his San Francisco project, he cobbled together EB-5 financing, historic and New Market tax credits, and a low-leverage senior construction loan.

Los Angeles-based hotel developer Bob Sonnenblick, Chairman of Sonnenblick Development LLC has been chosen to speak at the upcoming CHICOS (Caribbean) Hotel conference at The Hard Rock Hotel in Punta Cana, Dominican Republic on November 14th, 2014. The panel topic will be “Hotel Capital in The Caribbean”.

11:15 A.M. TO 12:15 P.M. – GENERAL SESSION: CAPITAL AND THE NEW NORMAL: Panel of capital providers and advisers discuss investments in the Caribbean and what it takes to get a deal done. Who is financing projects in the Caribbean and on what basis? While it appears that confidence in the region
amongst financiers is improving this does not appear to be translating into readily available capital. Funding has been scarce for so long that it appears as if the landscape may have changed permanently. Does this environment represent the “new normal”? If so what does the new normal look like? How are
deals currently being structured? What are the key terms and conditions? Who are we dealing with and how sustainable are their interest in the region? The ability to raise capital is going to be absolutely critical if, as appears to be the case, the region is over the worst of the economic cr isis and we can start
to look forward to the future with cautious optimism. Help us resolve this crucial issue by participating in an interactive discussion with our panel of innovative and imaginative financiers bringing a fresh approach to a difficult and complex problem.Moderator: Gary Brough, Managing Director- KPMGPanelists:
Nicholas Hecker, Senior Principal – Och Ziff Real Estate
Bill Sipple, Executive Managing Director – HVS Capital CorpBob Sonnenblick, Principal-Sonnenblick Development LLC
Adam Rosenberg, Global Head of Gaming & Leisure- Fortress Investment Group-Credit Funds

Talk to anybody in hospitality and they’ve got a hot project in the works. We did just that…

Sonnenblick Development principal Bob Sonnenblick

This morning, Sonnenblick Development principal Bob Sonnenblick (in full Halloween mode before trick-or-treating with his kids in Pacific Palisades) told us about his newest resort hotel project: Chambers Bay Resort in University Place, WA, a 30-minute drive from Sea-Tac Airport. What’s key for Bob, an avid golfer, is that next June, it’s going to be the home course of the 2015 US Open, where it will be seen by 300 million people on TV. Bob’s building a 320-room luxury hotel with a 40k SF conference center and a 10k SF spa, with a second golf course that will front directly on Puget Sound. The new course is being designed by the famed Robert Trent Jones Jr.

Bob says Chambers Bay is a $125M project. The hotel will be raised, so that people can look through the glass on the first floor and still enjoy the views (including the snow-capped peaks of the Olympic Mountains). He’s also working on a hotel site in the hot market of downtown Beverly Hills. Bob just got back from the bestvacation of his life: two weeks in Phuket, Thailand.

LA developer behind Chambers Bay resort says property is a ‘12′

The ground floor would be all glass so people walking onto the property can enjoy the views.

Robert Sonnenblick is the man who wants to build a $150 million resort at Chambers Bay, and he says as soon as he saw the location it was love at first sight.

“That site at Chambers Bay, on a scale of one to 10, is a 12,” said the Los Angeles-based developer. He plans to build a 258-room hotel, conference center and second golf course at the site in University Place where the U.S. Open will be played next June.

“To me, I’m shocked that no one built a hotel prior to me getting involved,” Sonnenblick said. “I fell in love with it the instant I walked onto the property.”

Sonnenblick is chairman of Sonnenblick Development, which was formed in 2011 to specialize in four-star oceanfront resort hotels across the country, with a focus on high-end golf resorts.

Sonnenblick heard about Chambers Bay about a year and half ago while working on a golf course and hotel development near Pinehurst Resort in North Carolina. Someone with the United States Golf Association told him Chambers Bay is hosting the 2015 U.S. Open and there weren’t any hotels near the golf course.

Sonnenblick was in Seattle for a business trip and decided to visit the golf course, which is owned by Pierce County. He said he stopped dead in his tracks when he set foot on the property, awed by the sweeping views of Puget Sound and the Olympics. He called it the best site for a hotel he has ever seen.

Part of Sonnenblick’s plan is to convert Pierce County’s award-winning Environmental Services Building into a 48,000-square-foot conference center and add a ballroom for weddings. The Environmental Services Building was designed by The Miller Hull Partnership.

“To have that already on the property is something that we’re thrilled with,” he said.

Pierce County is planning to build a new headquarters on the campus of the former Puget Sound Hospital and consolidate a third of its 3,000 employees. Officials say it’s too soon to say where employees now housed in the Environmental Services Building would go.

Construction of the county’s new headquarters could begin early next year. The county has picked a team headed by Wright Runstad Associates, with NBBJ Architects, Gunsul + Iverson Architects and Howard S. Wright. The headquarters could open by mid-2016.

More walking paths and biking trails would be built on the property to appeal to locals

Sonnenblick is big on views, and they are plentiful at Chambers Bay.

The new hotel will be raised about 22 feet in the air and the ground floor will be all glass so people walking onto the property can enjoy the views.

The hotel will have two restaurants and two bars. Sonnenblick said one of the bars will be like the “19th hole” found at most golf courses.

Adding a second golf course is an important part of the plan. Sonnenblick said the existing course is fescue grass and golf carts aren’t allowed, so it’s a walk-only course — and that doesn’t work with a hotel.

“The reason we need a second course is the normal tourist golfer does not walk,” he said.

Golfers will likely have better scores on the second course because it will have wider fairways and a more forgiving layout.

Sonnenblick also said he wants a “huge” increase in the number of walking paths and biking trails on the property to appeal to locals.

Sonnenblick said the plan is to offer discounts on rooms, food and beverages to people from University Place, Lakewood and Steilacoom.

His team just finished architectural renderings for the project and hopes to start construction next year.

“I want to start the day the U.S. Open finishes next June,” he said. “I don’t think the county or the city will be ready for us to start by then, so it will probably be a couple of months after that.”

Sonnenblick said the U.S. Open will generate tremendous publicity for his project before it even opens because Chambers Bay will be on the cover of golf magazines and featured on golf shows, just like Pinehurst was earlier this year.

Sonnenblick said he wants to build the hotel and golf course simultaneously and hopes to open both in mid-2017. He said the entire project will be privately funded.

The golf course design should be finished in about a month by architect Robert Trent Jones Jr., who also designed the original Chambers Bay Golf Course.

Other team members are: the Los Angeles office of Harley Ellis Devereaux, architect; Absher Construction of Puyallup, general contractor; KPFF of Tacoma, civil engineer; PCS Structural Solutions of Tacoma, structural engineer; and Transpo Group of Kirkland, traffic consultant.

(Editor’s note: This article was changed to reflect that PCS Structural Solutions is the structural engineer, and that the county hasn’t decided where to relocate its workers at the Environmental Services Building.)

Sonnenblick said he expects to hire a lot of local subcontractors.

This is Sonnenblick’s first project in Washington state, but not his first business venture here. He has financed several projects here over the years, including a $165 million construction loan and $35 million equity joint venture in the mid-1980s for Herman Sarkowsky’s AT&T Gateway Tower (now Seattle Municipal Tower).

Sonnenblick said several local companies have approached him about doing other projects since word got out about Chambers Bay. He said he is open to sites with views and waterfront access, but first wants to get the ball rolling on this one.

A Los Angeles developer unveiled drawings Tuesday for a resort at Chambers Bay in University Place that would be big and dramatic with a five-story hotel and sweeping views of Chambers Bay Golf Course and a proposed second course.

Chambers Bay Resort would consist of the 258-room hotel, a conference center, a 180-seat cafe and restaurant, and a swimming pool. The conference center would be located in what is now the county’s environmental services building, with a ballroom added on.

Pierce County Council members saw the architectural renderings for developer Bob Sonnenblick’s project for the first time Tuesday.

“That is the public’s property,” Ladenburg said. Those public amenities include the trails, parks and playground as well as the golf course where the 2015 U.S. Open will be played.

Her husband, John Ladenburg, was the county executive who spearheaded developing the former gravel mine into a championship golf course in 2007.

“To make sure that (citizens) still feel that that’s their property, I think, is very key with any development that we do out there,” said Connie Ladenburg, whose district includes University Place.

“We totally agree,” said county Executive Pat McCarthy. “Any place you put anything on this property is going to impact something. But the fact of the matter is we do have a philosophy that it does need to have good public access.”

County-owned Chambers Bay Golf Course will host the U.S. Open June 15-21 of next year. The resort hotel proposal is many months away from a final decision and would not interfere with the golf championship.

Deputy County Executive Kevin Phelps said it will take up to 18 months to update the master site plan, which would require approval by the County Council and the City Councils for both University Place and Lakewood.

The County Council likely would have to authorize the county executive to enter into an agreement with Sonnenblick.

Sonnenblick started a second 90-day extension granted by McCarthy for planning the project last week.

Phelps said Sonnenblick will have to propose financing that meets the county’s needs. The master site plan must be modified, and Sonnenblick must determine if he can fit in a second golf course.

Sonnenblick, chairman of Sonnenblick Development, said his $150 million project will enhance public access to Chambers Creek Regional Park.

“I am designing the hotel to increase public access,” Sonnenblick said in a phone interview Tuesday. “We are going to add a huge number of walking and biking trails.”

He said the project’s lower levels would be lifted up and lined with glass so that visitors could see the Puget Sound and the Olympic Mountains.

“We’re very excited about the project, and we designed it based on the input from a lot of local groups,” he said.

Sonnenblick hired Robert Trent Jones Jr.’s company to design the second golf course. Jones also designed the original Chambers Bay Golf Course.

Hole routings for the second course are expected to be completed in about three weeks, Sonnenblick said.

A second 18-hole course where golfers could ride carts is crucial for attracting older, higher-income customers to the resort, Sonnenblick said. Chambers Bay prohibits carts to prevent damage to fescue grass on the links-style course.

Sonnenblick met with University Place planners last month to ask questions of city planning staff as it related to his proposed development.

The City of University Place is waiting to see more detailed information about how the site will be developed, including plans for the second 18-hole golf course.

“We’ve only seen renderings of the hotel, we haven’t seen any maps or site plans,” UP City Manager Steve Sugg said Tuesday. “It’s our practice that we don’t react to renderings.”

But Sugg did say the city is interested in the project.

“The idea of a destination golf resort in UP is certainly appealing, but the details will have to be worked out,” he said.

Sonnenblick’s plan describes the hotel as reaching 66 feet, which is taller than the city’s current zoning allows. That is one of the issues that would have to be addressed through the site plan amendment process, Sugg said.

“We’ll let the process determine the outcome,” he said.

The only two council members to offer feedback were Connie Ladenburg, D-Tacoma, and Stan Flemming, R-Gig Harbor. Both voiced concerns about whether public access would be maintained.

LA-based real estate developer Bob Sonnenblick, Chairman of Sonnenblick Development LLC, has been chosen to lead the Government Tenant Development Panel at the upcoming NFDA Government Real Estate Conference in Sacramento on October 1, 2014.

The Conference, the first of its kind on the West Coast, focuses on all aspects of Government-tenanted real estate projects from development, financing, management, procurement, sales, and leasing.

Please join regional leaders for the first Western Regional NFOA (National Federal Development Association | www.ndfa.us) conference on October 1, 2014 at the Sutter Club, Sacramento.

We believe this to be the first conference of its kind In the region, that is, all matters relating to government -leased and occupied real estate.

You are also invited to sponsor the event as we believe your endorsement of the conference will prove to be beneficial t o your organizational as well as the participants attending the conference due to the unique nature of this particular conference. Sponsorships are $500.00. Your logo will appear in all our promotional materials with a link to your website, invitations & announcements on the NFDA website event page, banner at the event, program at the event as well as in the audio visual displays.

Extended Stay Segment: This panel will provide insights into branding, acquisition, management, development and expansion possibilities in gateway cities as well as secondary and tertiary markets for Extended Stay-type properties.

Speaker Panels Released

The agenda includes 40 senior level panelist, 7 high level sessions, 5 hours of networking, 2 networking receptions and endless opportunities to connect with friends in a peer to peer networking environment. There is still time to close more business in 2014

Top industry leaders have confirmed to speak at the event and the entire industry is planning their schedule and calendars to be in Los Angeles to participate in the industry’s leading regional event. This conference is designed to identify opportunities, create relationships & close business. The agenda for InterFace California Trends will examine both Macro and Micro commercial real estate trends affecting California and the Western region.

Bob Sonnenblick, Chairman of Los Angeles-based Sonnenblick Development LLC, has been chosen to moderate the Finance panel at the upcoming Lodging Conference on October 21 at the Arizona Biltmore Hotel in Scottsdale, Arizona.

11:15 – 12:30

CONCURRENT THINK TANKS

T-3: Essentials to Meeting Lender Requirements

The discussion will focus on which lenders and mezzanine providers are the most active sources of capital in the hotel industry marketplace today and how you can expedite the loan application process by knowing what underwriters look for and the documentation that you should provide including historical rates and occupancy, property condition, standard reporting, operating statements, appraisal analysis, brand affiliation, and completed and planned upgrades.

Bob Sonnenblick to moderate the “Luxury Hotels & Resorts” panel at the Thinc Hotel Conference in Bali, Indonesia on Sept 5th at the Sofitel Bali Hotel.

4:10PM – 5:00 PM

Luxe in Flux: The Next Big Trends in Luxury Hotels and ResortsWhat lies ahead for this segment and is it a profitable business model to invest in?
What are the popular and upcoming trends in in the Luxury hotel/resort segment?

Moderator

Robert (Bob) Sonnenblick, Chairman. Sonnenblick Development

Panelists

Agustono Effendy, Business Development General Manager, PT Ciputra Property TbkArjan De Boer, SVP Development and Technical Services -Asia Pacific, Regent Hotels and Resorts

In Focus: Washington, DC
By Chelsey Leffet and Jerod S. ByrdAs economic recovery resumes and tourism strengthens, Washington, D.C. remains a top draw for leisure, convention, and government demand, with area hotels achieving some of the highest RevPAR levels in the nation.

In one of the highlight sessions at the Tourism, Hotel Investment & Networking Conference (THINC) Indonesia 2014, Robert (Bob) Sonnenblick, Chairman – Sonnenblick Development, will lead a panel discussion comprising some of the most prominent players in the region’s Luxury Hotel and Resort segment. The session, titled ‘Luxe in Flux: The Next Big Trends in Luxury Hotels and Resorts’, will see this select panel of industry experts share their perspectives and knowledge of the market, discuss latest trends, and what lies ahead for this segment in the years to come.

The Beverly Hills hotel market, which boasts some of the highest room rates in the region but has not seen a new property built in nearly six years, is starting to heat up.

In what one city official conceded was an unusual overture, Pacific Palisades developer Sonnenblick Development has submitted an unsolicited proposal to build a 124-room luxury Auberge Resorts hotel on a 1.4 acre city-owned property at 9268 Third St.

The hotel, right in the backyard of another luxury hotel, L’Ermitage Beverly Hills, would be built on land leased from the city. The parcel now houses a small office building that has been the home of Lakeshore Entertainment since 2005.

In response to the proposal, the City Council directed staff to hold an informal public meeting last month to gauge public interest and advise the council on next steps.

While unsolicited proposals are not common, David Lightner, deputy city manager, said Beverly Hills had received expressions of interest recently for other city-owned properties, including a 5-acre site nearby on Foothill Road between Third and Alder streets.

“These proposals are not frequent,” Lightner said. “During the recession years, it was fairly unlikely. As the city emerged from recession starting from 2012, developers started looking at the (Lakeshore) site.”

Robert Sonnenblick, principal of the development firm, said in an email to the Business Journal that he was interested in the Lakeshore site because its quiet neighborhood can attract a high-end clientele, pointing to L’Ermitage’s success. He approached the city because it could give him a better deal than other privately owned sites in Beverly Hills. Land is scarce and difficult to find in the city.

“First, we really like the hotel market in Beverly Hills. It’s really strong and it has a great history,” he wrote. “Second, all of the other sites are being bid up to crazy prices by condo developers.”

That has residents wondering if the city is getting a good deal if it were to move forward with the hotel.

Marilyn Gallup, vice president of community group Beverly Hills Municipal League, said the city needs to determine a true value for the site before showing interest in projects like this.

“Looking at the renderings, it looked very nice. I’m not for it or against it,” Gallup said of the proposal. “First you have to put value on the land to know whether or not the city would be getting a good return. The city needs to decide what they want to do with the properties before you start looking at individual projects.”

That, said Lightner, is exactly what the city is doing.

“Is this the highest and best economic generator for the city? Are there other municipal functions? Are there other functions anticipated?” he asked. “That’s why the City Council said, ‘Let’s go talk to people and figure it out.’”

Healthy market

A recent report by PKF Consulting USA estimated that Beverly Hills had an average room rate of $414 and market occupancy rate of 77.3 percent last year.

Sonnenblick said a hotel on the site could generate as much as $2.5 million a year in transient occupancy taxes in addition to its payments on the ground lease.

Lightner said revenue generated by a hotel could be significant, but the city was still researching potential returns.

The last hotel to be built in Beverly Hills was the Montage, at 225 N. Canon Drive, which bowed in late 2008, and the prospect of another hotel in the city, whether an Auberge or another operator, remains preliminary. The Lakeshore site, just north of Burton Way and about four blocks west of the Four Seasons Hotel on Doheny Drive, would need to be rezoned to accommodate a hotel. Lightner said the property is zoned for parking, institutions and parks; rezoning the property would be a lengthy process requiring further studies and examinations of the site.

Lakeshore has a lease that runs for another year with an option for a five-year renewal. Lightner said the city could end that lease if the site were to be redeveloped.

Sonnenblick is not the only one to express interest in redeveloping the site as a hotel. Lightner said the owners of L’Ermitage, which fronts on Burton and backs on the Lakeshore site, has also expressed interest. A spokeswoman for L’Ermitage declined to comment.

Alan X. Reay of Irvine hospitality consultancy Atlas Hospitality Group said there is more than enough room for Beverly Hills to take on another hotel. He said the West L.A.-Beverly Hills hotel market is one of the nation’s best, second only to Manhattan.

“The L’Ermitage is 39 years old and it’s a nice building,” Reay said. “But with this proposal, you have this new product with a Beverly Hills address. There’s so much demand right now, the city could easily absorb a 124-room hotel. Ninety percent of the cities we deal with love the (transient occupancy taxes). It drives jobs and hotels.”

May 15, 2014 by Ian RitterRobert Sonnenblick, Chairman of Sonnenblick Development, has completed over $1.5B of commercial real estate transactions on the west coast. Among the most notable include: Beaudry Center, LA ($197M), The Ritz-Carlton Hotel, Pasadena ($97M), One Waterfront Plaza, Honolulu, HI ($100M) and the LA World Trade Center ($55M). He was also an original development partner of the $90M Loews Santa Monica Beach Hotel, which sold for $125M.

One commercial real estate sector that GRS Group hasn’t touched on recently in this space is hospitality. Bob Sonnenblick, chairman of Sonnenblick Development LLC, recently filled us in on the current hotel trends, and he had plenty of good news to share. Development is back, core markets are hot and fundamentals are in good shape. Sonnenblick shared what he thinks are the hotel sector’s bright spots.

We hear a lot about multifamily and its boom. What is going on with the hospitality sector right now?

There’s no question that the apartment industry is the darling of the real estate business right now. Every investor, pension fund or builder is actively looking for apartments. But as a result, there has been huge competition in the apartment sector, and it’s taken away most of the profitability of being in that sector. It’s become a very hard and competitive business now.

The exact opposite is the case in the hotel business, where there are very few hotel developers still standing as a result of the previous recession from 2008 to 2012, when most of them all got wiped out. It’s actually a very good time to be a hotel developer right now.

Most importantly, hotel operations are at an all time high this year. Tourism in Los Angeles County just broke a record for the largest dollar volume of tourism ever. The actual business side of our industry is very strong.

What kind of development is happening?

The limited-service hotels, the ones without food and beverage components, like Hilton Garden Inn, Hyatt Place and Courtyard by Marriott, the real select-services are on fire. Those are the ones that are getting built around the country right now. There is very little construction of full-service, high-rise, four-star and five-star hotels.

What is driving this?

It is a very simple concept. The profit margins on the rooms component of a hotel are very high. The profit margins on the food and beverage components are very low. So people are building hotels now with only rooms in them and nothing else. The customer is OK with that. They’ll take a nice room and walk across the street to a restaurant.
There’s clearly an increase in spending that’s happened over the last year. Operations and profitability are up about seven percent this year alone, which is a huge jump. But these select-service hotels are generally equivalent rooms to the full-service hotels, but they’re priced 30 percent lower. The customer loves it.

How is business travel holding up?

Business travel is back up to the levels we had seven years ago. That part is all really good, and next year it will be even higher. In general, the outlook for the hotel industry is a very strong future over the next two or three years with very limited new supply.

Are there any parts of the country doing particularly well?

There are two parts of the country that are very strong, and not surprisingly, it’s the two coasts. The New York-Washington D.C.-Boston market is unbelievably strong. The L.A.-San Francisco combo-market is very strong. The third market that is equally strong is Miami and South Florida. The coastal markets are having phenomenal years. The middle of the country is fairly flat.

Are there any hotel projects you have on tap that you’d like to highlight?

We’ve got two projects in California that we are very excited about. The first one is the building of a $75-million hotel on the campus of the University of Southern California Medical Center, surrounded by four hospitals and three medical schools. it’s a very exciting project for us. And we’re doing a 137-room hotel inside the new terminal at Sacramento International Airport. Any time you build a hotel attached to the airport terminal, it gives you a big leg up on getting really good occupancy.

We are also actively looking for more sites around Southern California that are located near and attached to major hospital projects.

Do you see anything derailing this momentum?

Unless it’s some kind of wild international act of terrorism, other than that, I really see us having a pretty good two-to-three-year run in front of us before you see interest rates start going back up.

Published: Saturday, May 10, 2014 at 10:49 p.m.

Last Modified: Saturday, May 10, 2014 at 10:58 p.m.

DAYTONA BEACH

For all the optimism over new hotels, renovations and national convention business, Daytona Beach’s tourism tide still largely rises and falls with the fortunes of its largest hotel, the Hilton Daytona Beach Oceanfront Resort.

The Hilton’s influence runs deep in area tourism, from daily room rates to investor decisions on future hotels, industry watchers say. The 744-room resort carries the baggage of a rocky past — ownership changes, mortgage defaults — and an uncertain present. But as with the rest of the beachside, recent events suggest a brighter future for the Hilton. (snipped)

‘CAUGHT IN THE DOWNTURN’

The Hilton’s most-recent appraised value is way down from a 2007 appraisal that pegged the hotel’s worth at $150 million, though observers doubt that appraisal’s validity.

The hotel’s appraised value has little effect on the day-to-day lives of Daytona Beach residents, observers say. The hotel will stay open, and tourists will continue to stay there.

But it does send a signal to hotel developers, said Bob Sonnenblick, chairman of Los Angeles-based real estate development firm Sonnenblick Development.

If you see an established hotel like the Hilton is only worth ($68,000) per room and it will cost you $200,000 per room to build a new hotel, you will look at that and think, ‘It makes no sense to build any new hotels in this market,’” he said.

Buying shuttered or under-performing hotels and renovating them would be more attractive to developers than building new because the costs are much lower, Sonnenblick added.

Still, the appraisal hasn’t turned off one developer who’s looking to build a brand-new hotel on the beachside.

Finding the best construction methodology is almost like deciding whether the beginning of the toilet paper should go above or below the roll. It’s all personal preference, so we asked what top market experts liked best at Bisnow’s Construction & Development Summit last week..

It varies by product and even within product type, we learned. Take multifamily mixed-use specialists Brian Winley of Century West Partners and Related California’s Gino Canori (flanking Sonnenblick Development’s Bob Sonnenblick and Panattoni’s Mark Payne). While Brian says GMP is his preferred method, Gino likes cost-plus. Bob notes the timing of when contracts are signed also is important—he signs his at 3% drawings (that’s industry lingo for 3% done… but you all knew that).

Could it be? At Bisnow’s Construction & Development Summit last week, some bold predictions were made about a traffic-free 10. Read on (and stick around for the also exciting topics of land prices and permitting).

Sonnenblick Development chairman Bob Sonnenblick says the day the Expo Line extension opens, the eastbound 10 Freeway, which becomes bumper-to-bumper at 2pm, will be a totally different place. He also says the dissolution of California’s redevelopment agencies probably cost the industry $4B; all the cities had major projects lined up with RDAs, he says.

He also says the dissolution of California’s redevelopment agencies probably cost the industry $4B; all the cities had major projects lined up with RDAs, he says.

Bob’s a big proponent of design-build because, if well documented, it takes all the construction risk off of the developer’s shoulders. He says development is already hard enough: “If you can take that risk and lay it off on your contractor, it’s got to be the right way to do this thing.” Andy notes Hensel Phelps is budgeting projects it first saw seven to nine years ago, though “they’ve traded who’s actually going to do ’em a couple times.”

In hotels these days, it’s the haves versus the have-nots.
At some dining rooms, guests have to produce their room keys to eat at the
free breakfast buffet. No eggs and muffins for those staying in rooms with other
keys, even if the guests slept under the same roof.

At Chicago’s so-called triplex — where three hotel companies share space on
a city block — Starwood’s Aloft guests work out in a small gym within eyesight of
a much larger one shared by Marriott and Hyatt hotel guests.

“Starwood had an issue, they didn’t want their guests intermingling with the
other guests in the fitness area,” said Deno Yiankes, the head of investments and
development for White Lodging, which codeveloped and operates the Chicago
triplex. “Each brand has its own little hot button. Marriott and Hyatt said it
wasn’t a big deal, so they shared and got a bigger fitness center.”

Juggling those competing little hot buttons is one challenge developers face
as they put up more and more hotels housing two or more brands in the same
building.

Early this year, Marriott opened a hotel in Midtown Manhattan. The lower
half is a Courtyard by Marriott, the upper floors are the Residence Inn,
Marriott’s extended-stay brand. The Hyatt Hotels Corporation has two dualbranded
hotels and at least four more in the pipeline. Hilton, which already has
15 dual-branded hotels in North America, has 17 more approved or under
construction.

“It’s all the rage,” says Craig Mance, a senior vice president for development,
North America, at Hilton Worldwide. A hotel being remodeled on Chicago’s
Magnificent Mile will be split between its Hampton Inn brand while others will
belong to its Homewood Suites brand. Mixed together. On the same floor.

So even as hospitality corporations spend millions of dollars each year to
create distinct brands and experiences they hope will attract repeat customers,
the lines between brands are being blurred by the economics of higher land
prices.

Developers, trying to get the most out of high-priced downtown
metropolitan areas, are searching for ways to slash construction costs and get as
many rooms onto sites as possible.

That’s easier to do with two hotels that can share a pool, exercise room,
conference centers, laundry and kitchens. Those are all areas that take up space,
reducing the number of available rooms. The move reduces operating costs, too.

“There are huge efficiencies to be gained by making the little sandwiches and
putting them in the fridge at the limited-service hotel, running a bar at a
medium-service hotel, and a full bar and restaurant at another, all being run out
of the same kitchen,” said David Kessler, the national director of the commercial
real estate industry practice at CohnReznick, a consulting firm.

And although some hotel companies are embracing dual-branding, they are
struggling over how to maintain their separate identities and how to deal with
the awkward logistics that can arise, like free breakfasts for some hotel guests
but not others.

Brands become particularly wary when it comes to mixing hotels from
different corporations.

Chicago’s triplex opened just last year with three hoteliers sharing some
spaces, like laundry and meeting areas, but keeping other areas, like the gyms, as
well as entrances and lobbies, separate.

Others see more difficulties ahead.

“I think that project is crazy — like crazy bad,” argues Robert Sonnenblick, a
real estate developer who constructs hotels and resorts. “They put in hotels from three big reservations systems, all at the same price point, so that they’re all competing with each other on price. Consumers are going to rate-shop the three of them and choose the lowest one. It’s a race down to zero for the three competing hotels.”

A look at prices on the three corporations’ websites for a king-size bed at the
triplex on the same day in April showed they were within $10 of one another.
White Lodging argues that hotel prices for competing brands in urban
settings tend to be close, whether the hotels are on the same block or across the
street from one another. And executives at Hyatt say the experience has provided
a real-time measure of how they stack up against the competition.

“Once in a blue moon, you’ll see people from the neighboring hotel. But we
still call our lobby the gallery, and we have gallery hosts who will check you in
and pour you a glass of wine,” says Chris Walker, a vice president for Hyatt Place
and Hyatt House brands. “It’s paramount to us that we have control over the
lobby experience.”

Mr. Walker and others in the hotel industry say there are tensions and
continuing debate over what elements are important and make up the total
brand experience for the customer when considering combination developments.
“The purist in me says I don’t want to give up anything. For it to be the Hyatt
experience, it has to be 100 percent. But I’m also a realist and know that that
stance would dramatically eliminate a number of projects that the development
team could pursue,” Mr. Walker says.

“We got all of the efficiencies of running the property with single
housekeeping, one laundry, and amenities are also shared like the pool, fitness
center and guest laundry,” says David B. Pollin, a co-founder of the
Buccini/Pollin Group, which built and operates the site. “Plus, these two brands
attract two different types of travelers.”

If one brand is full, Mr. Pollin adds, the group has the option to “upgrade”
the traveler to the other.

But breakfast can be tricky. “The Hilton Garden Inn guests are very smart
and try to sneak in for the free breakfast available at the Homewood Suites,”
acknowledges Mr. Pollin, who says hotel staff members try to check guest keys.
Still, hospitality executives generally don’t expect many luxury properties to
jump into the mix because the guest expectations vary widely.

“If you’re used to getting misted at the pool, whether it’s a Waldorf or a Ritz,
and Mr. and Mrs. Smith with their 11 kids who are staying at the Hampton Inn
suddenly jump in, well, that’s not the kind of misting that they want,” says Mr.
Mance of Hilton. “I could see some conflicts arising out of that.”
A version of this article appears in print on April 23, 2014, on page B1 of the New York edition with the
headline: Hotel Brands Doubling Up in Cities Where Space Is Tight.

November will be an especially busy month for Sonnenblick Development’s hospitality activities. Chairman Bob Sonnenblick (at the 7th Hole at Pebble Beach) tells us he’s just finishing design and has put financing down for a $75M Hyatt House on the campus of the USC Medical Center; groundbreaking is slated for Nov. 1. Also getting started that month: a $40M Hyatt Place in the new terminal building at Sacramento International Airport. He’s got other hotels in the works in Palm Springs and in Pinehurst, NC, where a $150M, 330-room Westin Hotel will boast two golf courses.

With 200 rooms and suites, and surrounded by four hospitals, the USC Hyatt House just east of Downtown will cater to patients and their family members. (As long as your continental breakfast is better than the hospital food, you’re on the right track.) In addition, Bob’s searching up and down the SoCal coast for waterfront hotel sites; but there isn’t much oceanfront left. He’s not deterred, though. He’s involved on projects on the waterfronts in Seattle and Palm Beach, Fla., and makes time to go up to Pebble Beach once a month to golf and get inspiration on the 17-Mile Drive. We hope you’ll join us for our LA Construction & Development Summit, April 24 at the JW Marriott at LA Live.

Thursday, April 24, 2014

JW Marriott Los Angeles L.A. LIVE

LA Construction & Development

With major projects in the pipeline, cranes in the ground, and high tenant demand, the state of the construction & current development in Los Angeles is at a pivotal point. Join Bisnow this April as we hear the experts discuss what it takes to get a new project off the ground, how developers are redeveloping existing assets, what innovative methods are being leveraged to keep projects moving, how the needs of tenants are affecting construction trends, what it takes to get a project financed, and much more.

EARLY BIRD PRICE $59

Boutique Hotel Investment Conference June 4 in New York CityBLLA
JOIN US as as a select group of experienced panelists and keynote speakers present their findings to attendees. You will walk away with a new network of individuals as well as knowledge about how to clearly navigate the murky (and exciting) waters of investing in boutique & lifestyle luxury properties.SPONSOR this conference to get your name in front of a database of over 100K!This conference Powered by BLLA, in cooperation with JF Capital Advisors.Click here to RSVP!What:
BLLA 2nd Annual Boutique Hotel Investment ConferenceWhen:
Conference runs 8am – 7:30 pm June 4th

Where:
New York Institute of Technology
1871 Broadway
Between West 61st & 62nd Streets
New York, New York

Event Summary
Boutique and lifestyle hotels are niche businesses that particularly cater to special types of customers. The boutique hotel segment of the hospitality industry is growing as global travelers spend more of their travel dollars on experiential travel.

Investing in boutique hotels is a great way for savvy executives to profit in the crowded hospitality marketplace. Opportunities for investment vary from starting your own boutique to renovating a struggling hotel to joining a partnership of investors. How one invests largely depends on opportunity and available capital.

This special sector of hospitality requires the developer to be prepared with facts, figures and an outstanding presentation for potential investors, lenders or equity partners.

This conference Powered by BLLA, in cooperation with JF Capital Advisors.

Sonnenblick has until mid June to line up financing, an issue that he doesn’t believe will be a problem. “There’s a lot of money around today for well-conceived, well-located, first-class projects,” he told the Tacoma News Tribune.

If Sonnenblick gets all his ducks in line, construction could begin next summer, after the U.S. Open is contested at the facility.

A potential $168 million development in the old service district on the outskirts of downtown Pinehurst has ties to some star power.

Blaine East, of Landcore, said in a presentation to the Village Council Tuesday night that they have brought in some “unique partners” for Village Place at Pinehurst, including a restaurant owned by Robert Irvine, who has a show on the Food Network, Justin Timberlake’s Southern Hospitality restaurant and a winery owned by Richard Childress of NASCAR fame.

He added that Irvine would also like to build a production studio next to the restaurant to tape programs for his show.

“We’ve taken this core and created this fantastic entertainment component,” East said.

It would also include upscale shops, microbrewery, cigar bar, small hotel, village market, offices and residential units.

Each of the restaurants will be flanked by retail businesses, which he said are “a driving factor” in the development.

East said the plans include a small “boutique” hotel that will not “interfere” with existing hotels in the village. The plan did not indicate how many rooms it would have.

“We are not talking about a large facility,” he told the council.

East said the Village Market grocery store would be similar to the Department Store in the downtown during the days when the Tufts family owned Pinehurst.

“This will be a great retail facility,” he said. “People can walk to it.”

East said the development would employee 450 people, and its businesses are projected to have gross sales of $63 million annually. He said it would generate $2.25 million in property taxes for the village and the county and about $6.1 million in sales tax revenues annually.

East said the development would have an “old town character.” He said it is not intended to hurt the restaurants and shops in the Village Center, but to enhance the entire area.

“We have a chance to grow our retail in the village,” he said.

Koontz added that they envision a lot of outdoor dining and people walking back and forth from the village center, as well as the nearby Pinehurst Arboretum and Rassie Wicker Park.

“We want this to become a great pedestrian plaza,” he said.

Koontz said the plan would also extend Rattlesnake Trail, which would be renamed Village Place Drive, through the development, providing better connectivity from the soon-to-be widened N.C. 211 into the Village Center.

“We felt we could provide something very exciting,” East said. “Our goal is to have a new destination.”

The buildings would be spread around the development to create open space. Residential units would be above the stores and offices.

Walkways and paths would connect to the Village Center and the nearby Pinehurst Arboretum and Rassie Wicker Park. There would be a trolley service, just like in the early days of Pinehurst.

East said the final plan for the development will be based on what the community wants and will support. Required meetings will be held to gather input from residents before a final plan is submitted to the village.

“We have a passion for this, to bring something truly great for the area,” he said.

The concept plans drew praise from council members and the public.

“You know I am a hard sell,” resident Jack Farrell said. “This is pretty exciting. This is the best A-1 plan I’ve ever seen for this area. I know the devil is in the detail.”

Farrell added, “I am looking forward to my tax reduction.”

Mark Lyczkowski, who lives at Pinehurst No. 6, said this will create a “destination” that would complement the existing downtown.

“Landcore has the funding in place to do this,” he said. “You have a great developer who can bring something great.”

Mayor Nancy Fiorillo said it is a “very interesting concept and beautiful design.” She said it must be a “community-centered” plan.

“We need to take a deep breath,” she said. “What will the community support? It will not happen overnight.”

East said the developers also plan to work closely with the merchants and business owners in the downtown in marketing the entire area. He said that will start with the Village Green and “expand outward.”

He said if the core village is vibrant, “it helps everyone. Let’s all roll up our selves and work together.”

Also during the meeting, the council voted unanimously to allow retirement communities on a case-by-case basis in the Office and Professional zoning district and to rezone five acres off Murdocksville Road behind Olmsted Village for a 56-unit apartment complex for people age 55 and older.

The council turned down a nearly identical request last April but voted earlier this year to reconsider the application after being threatened with a possible housing discrimination complaint.

Also, a majority of council members are not in favor of hiring attorneys to represent the Historic Preservation Commission (HPC) and the Board of Adjustment in the case of an appeal of an HPC decision last month to reject plans for a home on Everette Road. The Village Council hired attorneys for both boards when it appealed the HPC’s denial of plans to improve the Village Green.

Council member John Strickland brought up the matter, saying it was a matter of being fair to hire attorneys for the two boards.

Mayor Nancy Fiorillo said Village Attorney Mike Newman had contacted council members individually to ask about whether the village should pay for attorneys for the two boards. She said neither board has asked the council to provide an attorney and that Newman was trying to see how council members felt. No vote has been taken on the issue.

This 2007 photo shows the Chambers Creek Properties site, including Chambers Bay golf course. A developer proposes to build a second course and a resort hotel on the site.

The online snipers are already weighing in on a $120 million proposal for a golf course and resort hotel/conference center at Chambers Bay. And they’re not happy. Not happy at all.

Yes, folks, let’s look this gift horse squarely in the mouth. After all, it’s not as if the developer – Bob Sonnenblick of Los Angeles – would foot the bill for the project.

Oh, wait a minute: He would.

“We put up 100 percent of the money,” he told The News Tribune’s Steve Maynard.

Repeat: He would pay for it. Not taxpayers, not sewer customers. All we’d have to do is enjoy the tourism revenue and sales tax money the project would generate – along with the jobs, of course. Can’t have that.

Sonnenblick Development – which has been involved in a number of high-end projects all over the country – is in very preliminary talks with Pierce County about a $120 million proposal for the Chambers Bay site in University Place. It has until mid-June to to come up with a project and financing plan. Even if it gets the green light, nothing would start happening until after the U.S. Open in June 2015.

So there’s no harm in seeing what Sonnenblick envisions for the site. At the very least, it would be exciting to see what a company with Sonnenblick’s impressive portfolio thinks is doable at Chambers Bay.

For their part, county officials have to ask whether the region could support another golf course – even one with an incredible view that golfers can get around on with carts, something they can’t do at Chambers Bay, a public links-style course owned by Pierce County. After four years, the course started making money only last year. The Sonnenblick project would be privately operated and would use the same course designer as Chambers Bay, Robert Trent Jones Jr.

Other questions: The public worked for months on the master site plan for Chambers Creek Properties, and it involved only one golf course. How would adding a second, 180-acre course affect the variety of public uses that were identified in the master planning process?

Would there be any impact on the hugely popular walking trail? Would a second course be any barrier to future national tournaments? And what would be the impacts of additional traffic on the surrounding community?

None of these questions necessarily suggests a deal-killer. In fact, it’s a luxury to have such an important proposal to ask questions about. It means private development is finally discovering the potential of the Chambers Creek Properties site.

Who knows whether the Sonnenblick proposal is the one that will materialize. Just the fact that the discussion is happening is a welcome one.